Friday 26 / April / 2024
Muscat: Fuel stations are staffing up to deal with an end-of-month rush as experts are predicting a rise at the pumps after a rally in the oil price.
Globally, oil prices have surged dramatically this month as the Oil Production and Exporting Countries (OPEC) have hinted at a production freeze.
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“We expect a price rise in September. However, we don’t expect a rush on the day of new price announcement. It seems that consumers have now adjusted to the fluctuating prices,” Rajeev KR, a senior official at Siraj Al Jazeera Projects, a fuel sales company in Oman, said.
“But we don’t want to take any risks. We have plans to deploy extra staff on the day of the price announcement to handle the rush,” Rajeev added.
Currently, the cost of Super grade petrol is 166 baisas per litre, 156 baisas for Regular grade petrol and 178 baisas for diesel per litre.
In July, the cost of Super grade petrol was 180 baisas per litre, 170 baisas for Regular grade and 188 baisas for diesel.
Meanwhile, Robin Mills, a Middle East energy expert and author of ‘The Myth of the Oil Crisis’ and ‘Capturing Carbon’, said Oman will have to raise fuel prices further next month, given the appreciation in crude oil prices.
Expected to rise
“I expect oil prices overall to rise somewhat during the rest of the year, but with ups and downs,” he added.
According to a tweet posted by Oman’s Ministry of Oil and Gas, Omani crude was trading at $45.85 per barrel on Monday at the Dubai Mercantile Exchange (DME), which was $0.67 lesser in value than Sunday. .
However, last Thursday, Omani crude’s value was $47.2 per barrel at the DME.
Oman had deregulated prices of petroleum products in mid-January, resulting in a 38.3 per cent jump in the price of Super grade petrol to 166 baisas per litre in August (against 120 baisas before mid-January), a 36.8 per cent growth was seen in regular grade petrol prices to 156 baisas per litre (against 114 baisas before mid-January), and a 21.9 per cent surge in diesel prices to 178 baisas (against 146 baisas prior to mid-January).
Meanwhile, ratings agency Moody’s noted that Gulf Cooperation Council countries will face some near-term relief from higher oil prices, with narrower fiscal and current account deficits than previously expected.
“In particular, Oman, Kuwait and Qatar are set to be the main beneficiaries of higher oil prices in the short term, given the larger reliance on oil for government revenues,” Steffen Dyck, a senior credit officer at Moody’s, explained.
Moody’s now forecasts a gross domestic product (GDP) deficit of 15.1 per cent for Oman in 2016 and expects oil prices to remain low, moving within the $40 to
$60 per barrel range over the medium term.
The ratings agency also projects fiscal gains of 3.5 to 4.5 per cent of the gross domestic product (GDP) of Oman over the 2016 to 2017 period, adding that on the external side, higher oil prices will benefit Oman the most by reducing the current account deficits by an average of 4 to 7 per cent of the GDP, followed by Qatar, Saudi Arabia and Bahrain.
On August 8, OPEC said it would meet on the sidelines of an energy conference in Algiers in late September, which will also be attended by non-OPEC producers. Saudi Arabia has confirmed it is on board with discussing actions if prices remain low, and that has imparted much more credibility to the talks.
Since the Saudis officially joined in, oil has risen more than 15 per cent. It was Saudi Arabia that pushed the OPEC strategy of letting the market set prices.
That had resulted in a steep decline in oil—to lows in the $20s last winter—as producers kept pumping, adding to a giant global oil glut.
Meanwhile, latest reports indicate that oil prices fell nearly 3 per cent on Monday as China ramped up exports of refined products, US oil producers added rigs for an eighth consecutive week, and prospects emerged for increased exports from Iraq and Nigeria.
