Pain at pump with fuel price rise likely in the pipeline
Pain at pump with fuel price rise likely in the pipeline
The Lao Petroleum and Gas Association expects that fuel prices may be increased by about 1 percent or less in Laos, as the world oil price may increase over the next three months.
“On the other hand, the government may maintain the current price,” an Association official said on Monday.
“The fuel price often increases at this time of the year as there is a surge in consumption during the winter in America and European countries. These countries will use a large amount of fuel as energy for heat and to power appliances,” he said.
“Consumption will also rise in Asian countries because it is the dry season, when these countries use a large amount of fuel for infrastructure development and construction projects”.
“Laos imports fuel from Thailand and Vietnam, and about 25 to 30 percent of the total imported fuel is used in the rainy season. However the rest of about 65 to 70 percent is used in the dry and hot seasons.”
Total fuel consumption in Laos was more than 911 million litres in 2013 and has since risen by about 7 to 10 percent per year. “This year we expect to import about 1,178 million litres,” the official said.
Last year the world oil price rose to about US$100-US$110 per barrel, and the current price is about US$86 to US$87 per barrel. “But even if the world oil price rises, it won’t rise to last year’s price because global economic growth is still slow,” he added.
“If the oil price is adjusted in Laos, it won’t be by more than 1 percent.”
Currently petrol stations in Vientiane are selling diesel for 8,640 kip per litre, with the cost at 8,670 to 8,900 kip per litre in the provinces of Khammuan, Savannakhet, Champassak, Bokeo and Xieng Khuang.
Premium petrol is selling for 11,040 kip per litre and regular for 9,710 kip per litre in Vientiane, while in the five provinces it costs between 11,040 kip and 11,160 kip per litre, with regular selling for 9,750 kip to 9,950 kip per litre.
World fuel prices fluctuate in line with shifts in the global market and the world economy, and fuel prices in Laos reflect these movements.
Expectations for world economic growth in 2014 and 2015 remain unchanged at 3.2 percent and 3.6 percent respectively, following a re-basing on 2011 purchase power parity, according to the OPEC monthly oil market report posted on its website on October 10 this year.
The report noted that demand for OPEC crude in 2014 remains unchanged from the previous report at 29.5 mb/d. In 2015, demand for OPEC crude is seen averaging 29.2 mb/d, in line with previous expectations.
It noted on the product market outlook ahead of winter that oil product markets in the major consuming regions have performed relatively well. In the Atlantic Basin, product markets received support from healthy US gasoline demand of around 9.0 mb/d. However, higher refinery runs amid increasing gasoline and middle distillate inventories started to exert pressure, thus limiting the rise in refining margins on both sides of the Atlantic. In Asia, strong light distillate demand, mainly from the petrochemical sector, offset the impact of increasing supply with several refineries back from maintenance, preventing margins from falling further.
In Laos, the Ministry of Commerce and Industry has adjusted the oil price 15 times so far this year, authorising four increases and 11 reductions, the Association reported.
vientiane times
