AFP: Oil Prices are Said to Climb up 0.03 to 0.05 GEL
Oil prices have hit an 18-month high at 85.71 USD per barrel at the beginning of this month, but last Wednesday the rate decreased again after a 7-day surge. For example, at the April 8 trading session of the New York Mercantile Exchange the oil price per barrel dropped 0.68 USD, while the OPEC prices also recorded fall to 81.76 USD from 82.42 USD.
Analysts say there are several reasons the oil price has decreased. The information the US Department of Labor has spread is the first one. According to the statement, the number of the unemployed has increased by 18,000 individuals in the country for the last week. The second reason for drop in oil prices is said to have relations with the increased oil reserves. The U.S., which is major consumer of energy carriers, has increased crude oil reserves by 1.89 million barrels to 356.2 million barrel.
Specialists note the strengthened rate of USD against EUR is seriously affecting prices. Experts stress one more circumstance. Namely, the sovereign debts of Greece mark several tens of billion of EUR and the fact may become a serious headache for the European Union.
Despite these difficulties, some specialists assert this summer, namely, June will record 110 USD per barrel of oil. Stefan Stork, an oil market analyst, says the near future will mark 95 USD per barrel, while the figure will hit 110 USD in late June.
Incidentally, oil prices reached the historic maximum in summer of 2008, namely, in the month of June. The price per barrel of oil was 140 USD. According to certain considerations, energy carrier exporter countries will make much benefit in 2010. For instance, Bank of America industry analyst David Horen is sure this year the Russian Federation national economy will show the world’s best indicator of economic growth.
Horen says the Russia’s GDP growth rate will record 7 percent thanks to the rapidly increasing oil prices. It is famous that the exports of energy carriers are driving the Russia’s economy. The price of Russian oil mark of Ural has increased by 97 percent since 2008. According to Bank of America data, the very oil resources has contributed to the 6.5 percent rise in the Russia’s GDP in the first quarter of 2010.
The global market tendencies are expected to affect the Georgia’s market too. The Union of Oil Products Enterprisers, Importers and Customers of Georgia has already announced fuel price will climb up 0.03 to 0.05 GEL in the retail sector. Despite the fact Georgian consumers consider the current fuel prices extremely unrealistic, both the Union and oil importer companies say the oil price is determined by the global market realities.
Shavleg Mishveladze, Lukoil Georgia's director general, says the oil price has recorded considerable growth on global exchanges and Georgia is unable to ignore the tendencies, because the country imports, not exports oil products.
Representatives of Georgian oil product companies note the fuel price was to climb up in February 2010, but the rates were not increased taking into account the consumer interests despite the international prices had gone up. After the comparatively cheaper fuel run out in Georgia, the price recorded a 0.05 GEL rise on March 29-30.
The gasoline international price under the PLATT’S is increasing for the last several weeks, the Union says. On February 12 the petrol international price per ton made up 642.25 USD, while currently, the figure has reached 793 USD, that is, the price has climbed up 23 percent in the period.
Representatives of oil product importer companies note fuel prices in Georgia depend on a umber fundamental factors: the fuel price, transportation costs (34 GEL per ton), excise tax (250 GEL per ton o petrol and 150 GEL per ton of diesel), a 18 percent VAT for getting customs clearance for fuel imports, top profit margin (7 to 12 percent). As a result, all these costs define the ultimate market price of fuel in Georgia.
As to the fuel reserves of oil product importer companies, the Union of Oil Products Importers says the last period’s instable situation on global markets has made importer companies not replenish their reserves.
Vasil Khorava, Wissol Petroleum Georgia director general, says the growth in fuel price brings a number of undesirable results to oil importer companies too, because supplementary operating capital becomes required and additional financial resources should be drawn from the bank sector. Moreover, the price upturn makes negative affect on the fuel sales.
Analysts note the growth in so-called black gold prices and the accompanied forecasts signify the global crisis will be completed soon. That is, consumers will have to pay more for oil products and other essentials in exchange for the global crisis completion. Anyway, the state budget will make profit – the volume of VAT inflows rises along with growth in prices of goods.
