Virgin Blue is considering charging passengers more to check in luggage in a bid to recoup costs as fuel prices continue to skyrocket.
The airline’s CEO, Brett Godfrey, hinted yesterday a fee for check-in baggage was imminent.
“With checked bag screening and the amount of security and handling of a bag, a bag actually costs more to put through on to the aeroplane than it does a passenger,” he said.
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Global financial markets open this week still in shock from Friday’s dramatic surge in oil prices and plunge in stock prices — and facing new doubts about the U.S. consumer’s ability to help spur a recovery in the struggling economy.
Asian stock markets were falling early today and the battered dollar continued to lose ground against other major currencies as investors braced for Wall Street’s starting bell.
There was a bit of relief in energy prices: Crude oil futures slipped $1.14 a barrel to $137.40 in electronic trading Sunday evening in New York. But that was just a sliver of the $10.75-a-barrel jump Friday to an all-time high of $138.54.
And in another reminder of what unprecedented oil prices are doing to Americans’ pocketbooks, AAA on Sunday said the nationwide average price of gasoline crept up to a record $4 a gallon — a level California already had surpassed.
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The walkout was announced after the collapse in talks between Unite and two companies who deliver fuel to Shell.
As a result around 1,000 forecourts could be starved of fuel unless a deal can be brokered next week by the arbitration service, ACAS.
Although Shell owns only 10 per cent of forecourts across the country, there are fears that the strike threat could trigger another wave of panic-buying.
Unite, which is representing 641 drivers working for Hoyer UK and Suckling Transport, has submitted a demand for a 13.2 per cent pay increase.
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The U.S. Commodity Futures Trading Commission and international market regulators will meet next week in Washington to address concerns about possible manipulation in the energy markets.
The conference comes after the CFTC, under pressure from U.S. lawmakers who blame speculation for food and fuel inflation, announced a slew of measures to increase surveillance of energy and other commodity markets.
“In this time of rising energy prices and increasing cross-border and cross-market activity in the commodity markets, it is essential that international regulators coordinate to ensure that they are working as efficiently and effectively as possible to detect and deter manipulation in the global energy markets,” said CFTC enforcement director Gregory Mocek in a press release.
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A fuel price hike could push up inflation into double-digit zone. At $125 a barrel, the price of the Indian basket of crude oil has more than doubled from the levels a year-ago. Prices of petrol and diesel, on the other hand, have seen a very modest jump of about 3-5 % during the same period.
The disproportionate increase in fuel prices vis-a-vis can be attributed to the government’s attempt to curb inflationary trend in the economy that grew at 9% in FY 2008. Inflation at 8.1% during the week ended 17 May 2008 has already touched a four-year high. Hike in prices of petrol and diesel is likely to take place anytime soon.
Inflation is likely to be 10-10 .5% after petroleum price hike (assuming that kerosene and LPG cylinder prices will be left untouched). In the recent past, whenever there was a hike in prices of diesel and petrol, wholesale price index (WPI) and price index for fuel products jumped substantially in the same week and in subsequent weeks.
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The weekly average oil prices of the Organization of Petroleum Exporting Countries (OPEC) rose slightly by 0.57 dollars, topping 124.30 dollars per barrel (dpb) last week, the Vienna-based cartel said Monday.
The daily prices set a record high of 127.59 dpb on May 22 and retreated steadily last week. The prices even touched 121.68 dpb Friday, 5.91 dollars lower than the historic high.
OPEC President Chakib Khelil, also the energy minister of Algeria, said Saturday that the high prices were “much more linked to speculation” and insisted that “there is no problem of supply.”
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