Fuel Price Revisions – August 2011
1-8-2011

Enemalta Corporation announces revisions in fuel prices effective 1st August 2011.

Product Previous Maximum Retaial Price Revised Maximum Retail Price Change
Unleaded
€1.39
€1.43
€0.04
Diesel
€1.32
€1.33
€0.01
Kerosene
€1.32
€1.33
€0.01
Gasoil for heating
€0.97
€0.98
€0.01

The above Maximum Retail Price reflects the prices fetched by Enemalta for the latest shipments of imported fuel.  The Unleaded and Diesel prices also reflect the increase in petrol stations’ maximum retail mark-up as approved by the Malta Resource Authority. TFO prices will not be published for the month of July due to MOBC closure.

Both the Unleaded and Diesel consignments delivered in July were based on July Platts prices which on average were higher that the previous delivery pricing basis (June).
 
During the month of July, Brent crude prices increased by 2.6% to $117 per barrel over the June average. The oil market remains extremely range-bound.  Since the release of the oil reserves by the International Energy Agency in late June, Brent crude has been trading in a roughly $10 range.  Indeed, the front month Brent contract has traded through the same level of $117.75 per barrel on each trading day over the past three weeks. 
 
Trading volumes were also restrained by lingering uncertainty over the health of the world's biggest economy and top oil user. According to market analysts, the lack of direction is primarily associated with the series of ongoing macroeconomic concerns that, U.S policymakers might not be able to reach a rational deal on debt problems.  Adding to the U.S debt crisis are concerns on Tropical Storm Don which may threaten oil facilities in the U.S. Gulf of Mexico.  Such threats have already provided some support on prices.
 
According to experts, the disappointing economic growth data both coming out from Europe and the U.S, is limiting the extent to which oil prices can rise assertively to an estimated level of $140 per barrel from current levels. Furthermore, Iran's OPEC governor issued a statement saying that international oil prices are expected to climb and that Saudi Arabia's decision to raise its own crude output cannot prevent a price rise (Reuters).
 
Rising petrol and diesel prices are making headlines across many countries. In Italy, Unleaded prices this week reached a record high of €1.641 per litre. Diesel was reported at €1.523 per litre.  Demand for diesel fuel has risen as a result of some industries increasing their production. Analysts claim that this would mean an increased demand for crude oil, one factor driving pump prices higher.
 
Figure 1 – ICE Brent Crude (January 2011 – July 2011)
 
 ICE Brent Crude
 
Source: Reuters
Petrol Platts prices (CIF Med, Premium Unleaded 10ppm) as at the 27th of July, (last trading day) soared by 5.8% to an average price of $1,066/MT over June end of month averages. 
 
Figure 2:  Premium Unleaded Gasoline Platts Prices (January 11 – July 11)
 
Unleaded Gasoline Platts
 
Source: Reuters
Diesel Platts prices (CIF Med, Diesel 10 ppm) as at the 27th of July (last trading day) rose by 2.5% to an average price of $1,006/MT over June end of month averages. 
 
Figure 3:  Diesel 10 ppm Platts Prices (January 11– July 11)
 
Diesel 
 
Source: Reuters
The EUR/USD rate registered a marginal drop of 1% to an average level of $1.4265 as at the 27th of July.
 
Figure 4:  EUR/USD trend (January 11– July 11)
 
EUR-USD Trend