-
US oil economist Phil Verleger - Source: ONE News -
Watch Video
-
Related
A prominent international oil economist visiting New Zealand says Kiwis should prepare for prices at the pump to rise by a further 15c a litre.
Dr Phil Verleger is one of the world's leading authorities on global oil markets.
He says that the troubles in Libya are having a big impact on the price at the pump all around the world.
"You have another 15c to go, assuming world crude prices don't come down," Verleger told TVNZ News at 8. "The eight cents, plus the 15, are almost entirely due to the Libyan troubles.
"We've lost about a million barrels a day from Libya."
Earlier today Prime Minister John Key said he was worried by the spike in petrol prices.
The price of fuel jumped twice in the past week, sitting at just less than $2.11 for a litre of 91 grade this morning. Last year petrol reached a high of $2.19.
Diesel has risen six cents to $1.43 at most stations.
Senior Automobile Association analyst Mark Stockdale agrees petrol could reach a new high as turmoil because of turmoil in the Middle East and as the world economy moves out of recession.
"We calculate that the imported cost of petrol has risen 10 cents per litre since the last pump price rise on February 16, which is double what the oil companies have passed on at the pump, and their costs have increased again since then," said Stockdale.
"We're not really getting any more supplies of oil coming onto the global market but demand is increasing so really if demand is increasing ahead of supply that does mean prices are going to go up," he said.
Verleger said the only way that would change would be if the Libyan situation is resolved or if the US and other countries release their strategic stocks of oil.
"Bill Daley, President Obama's advisor, said the Obama administration was considering using strategic stocks. That in my view would be a very good thing and could also take the price back down very quickly," Verleger said.
He said there were 1.6 billion barrels of oil in strategic stocks held by IEA countries.
"If we were to use a million barrels a day for six months that would take it down by roughly 200 million barrels and that would take the price back down."
New Zealand government powerless
Key said the government is powerless to stop prices from rising further.
"We've been here before and it's difficult for us to control," Key told TV ONE's Breakfast.
"For consumers, [petrol] is a big part of their weekly budget and they fill up the car and I worry about it in terms of the impact on other prices.
"We've had a stronger New Zealand dollar that's helped offset [price rises], but in recent times, there has been slightly more weakness because of the earthquakes."
The ANZ's chief economist Cameron Bagrie said a weak US dollar, high demand from developing nations, and trouble in the Middle East are all playing a part.
"If we see escalating tension in the Middle East and particularly if it moves into some of those other producers across the region, then the risks are you do see that big spike.
"If we see that, then we'll see domestic petrol prices move in tandem."
Bagrie said it is not just oil that is going up. Commodity prices across the board are increasing.
Verleger said prices should drop back down to the levels they were at a few weeks ago, if the Middle East situation eases or stocks are released.
He said they should drop by at least the 15c they are expected to rise, perhaps more but acknowledged that "the remark economists make is that retail prices go up like a rocket but come down like a feather".
Are you being hit hard by rising petrol costs? Have your
say on the messageboard below.
Latest NZ News Video
-
Mother and baby laid to rest (1:36)
-
Kiwi scientists help make history (0:29)
-
NZ scores part in telescope project (1:56)
Add a Comment:
Post new comment