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Cheapest petrol now over $2 a litre

Cheapest petrol now over $2 a litre
Adapted from Straits Time

ALL petrol grades have breached the $2 mark, hitting 2 1/2-year highs, following the latest price increase of four cents a litre last Friday.
The last time petrol was in the $2 territory across the board was in 2008.
A litre of 92-octane petrol, the cheapest grade, is now $2.017. The 95 grade costs $2.077, and the 98-octane, between $2.13 and $2.15.
Shell’s V-Power, marketed as an ‘ultra-premium 98′, is the costliest fuel at $2.359 a litre, while Caltex’s rival Platinum 98 is now at $2.215.
Diesel, used by taxis and commercial vehicles, is now between $1.60 and $1.603 a litre.
All prices are before various discounts.
The price spiral comes on the back of rising crude oil rates, which in turn has been driven by the unrest in the Middle East and North Africa.
Observers say that as the turmoil there shows no sign of abating, oil prices will continue on the uptrend.
Mr Ng Weng Hoong, the editor of energy news portal EnergyAsia, said the situation is dire.
He noted that unverified figures put the global spare capacity of oil at 5.5 million to six million barrels a day, with Saudi Arabia holding four to five million of that.
He also noted that Libya’s oil production has fallen from 1.6 million barrels a day to 0.6 million a day since its troubles began.
‘And Libyan crude is the good quality stuff – light and sweet. So the spare capacity that the Saudis said they will pump is not going to make up for that.’
Meanwhile, there is worry that the unrest will spread to the neighbouring oil producers, including Oman, Algeria and Bahrain.
And the crisis in Egypt has not settled yet, Mr Ng added.
Meanwhile, the United States has moved its warships closer to Libya, and European countries such as Italy and France are mulling military intervention.
‘China, which has huge investments in the region, may also send in ships,’ Mr Ng said. ‘The whole area is a powder keg for US$200 oil.’
The industry watcher said he is sticking to his prediction of oil reaching US$200 a barrel by 2013. Other analysts have also come out lately to say that US$200 oil is an eventuality.
Oil shot up from US$100 a barrel to a record US$147 a barrel in the first seven months of 2008 before easing with the global financial meltdown.
US crude futures for next month now hover at around US$106 a barrel, while Brent crude – which oil traders regard as the more relevant commodity – is trading at around US$117 a barrel.
Oil industry consultant Ong Eng Tong believes, however, that US crude is unlikely to cross US$110 a barrel.
He said: ‘At that price, there’ll be very serious economic implications for Europe. France and Italy will send in fighter jets before that happens.’
Meanwhile, motorists are starting to feel the pinch, with petrol breaching the $2-a-litre mark.
Mr Gilbert von der Aue, who heads C. Melchers’ oil and gas department, said: ‘We’re already seeing more enquiries from people who want to convert their cars to run on compressed natural gas.’

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