FuelClub Discount

Reliance Industries’ decision to shut down about two-thirds of its petrol pumps in the country due to continued losses today came up in the Rajya Sabha with some members demanding action against the private firm.

Raising a supplementary on an original question pertaining to capital investment by oil companies in foreign countries, Digvijay Singh (JD-U) said youths were being driven to suicide after closure of petrol pumps by the firm.

Without naming Reliance, he sought to know what action the Government proposed to take against the firm for “depriving” the youths, who had invested Rs two to three crore in the petrol pumps, of their livelihood.
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The Government owned National Oil Corporation of Kenya says it is to step up its expansion programme by acquiring more pump stations across the country.

Having the national oil company play a major role in the retail end will stabilise pump prices, said deputy managing director Sumayya Hassan-Athmani.

Pump prices have been hovering around the Sh100 mark within Nairobi’s Central Business District since the beginning of last week.

The oil marketer, which also doubles up as marketing agent for exploration blocks, has already acquired 34 fuel stations up from six stations it owned two years ago. The stations are spread across the country.
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French oil group Total said it is to merge its petroleum product operations in Portugal with those of Spanish partner Cia Espanola de Petroleos SA (Cepsa).
No financial terms were disclosed.
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Oil was formed in the geological past under well understood processes. In fact, the bulk of current production comes from just two epochs of extreme global warming, 90 and 150 million years ago, when algae proliferated in the warm sunlit waters, and the organic remains were preserved in the stagnant depths to be converted to oil by chemical reactions.

Natural gas was formed in a similar way save that it was derived from vegetal material. It follows that these are finite natural resources subject to depletion, which in turn means that production in any country or region starts following the initial discovery and ends when the resources are exhausted.

The peak of production is normally passed when approximately half the total has been taken, termed the midpoint of depletion.

Oil has been known since antiquity but the first wells were drilled for it in the mid 19th Century in Pennsylvania and the on the shores of the Caspian. The Industrial Revolution was already in progress being driven by the steam engine, fuelled by coal.
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In time-honoured fashion, the price of road fuel is soaring just ahead of a holiday weekend. The oil industry rarely misses an opportunity to deliver itself a public relations shot in the foot but this one is curious because it is the price of diesel that is soaring, more than petrol, and it is a systemic problem. We know the oil price has been high, peaking last week at $111 (?55.27) per barrel, and pump prices have risen in tandem but since the beginning of January the cost of diesel has risen at twice the rate of petrol. There is a shortage of diesel in Europe - some petrol stations have actually run dry - and the problem is there are just too many diesel cars.

The average UK retail price of petrol has risen from 103p per litre to 106.8p per litre since the new year but diesel has raced ahead from 108p to 114.3p. Normally, diesel drivers pay a smallish premium of 2p to 4p per litre over petrolheads but it has now escalated to 7.5p as supermarkets scramble for scarce cargoes. This may be a sign that a long-running shortage of diesel in Europe is getting worse. A cycle of refinery maintenance shutdowns and an unexpected cold snap late in the winter has coincided to create a temporary shortage. In search of extra fuel, importers have been buying cargoes of diesel in America for shipment to Europe.
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The average price of diesel oil on the Czech market increased by 20 hellers against a week ago to Kc30.96 a litre, while the top-selling petrol Natural 95 dipped by eight hellers to an average Kc30.50, data from the company CCS showed.

The gap between petrol and diesel oil prices has therefore widened. In contrast, from the start of the year the prices were getting closer together.

Analysts believe diesel prices will continue to grow in the coming days, while petrol prices will rather stagnate.

“The growth in diesel prices came mainly due to the sharply increasing price [on the bourse] in Rotterdam which has climbed up by over 28 percent since February 1, and this will soon be felt at Czech petrol stations,” Colosseum analyst Petr Cermak said.

Not even the constant firming of the crown will prevent diesel prices from growing, Cermak said.

“Petrol stations will probably be unable to resist the pressure of the growing oil prices and will raise their prices as well,” he said.

Cermak believes that in a fortnight, diesel prices will be tens of hellers higher.

Next Finance economist Vladimir Pikora does not expect a dramatic growth in fuel prices.

“Despite the record-high oil prices, the growth will be only in the order of several tens of hellers in the horizon of several weeks. For now, there is no reason for panic,” Pikora said.

The growth in oil prices by 16 percent since the beginning of the year and by over 75 percent in the last twelve months is not such a bad news for motorists as it may seem at first sight.

“The oil price in crowns is only moderately above the 50-day sliding average. And the crown still has room for further firming to the dollar,” Pikora said.

Fuel prices decreased slightly in previous days after a significant price growth in the second half of February that interrupted the downward trend of the last two months.

Average Czech fuel prices (Kc/litre) as of March 17, 2008:

Source: PragueMonitor