CommSec warns that unrest in Egypt will have an effect on diesel prices
By Ruza Zivkusic | February 1, 2011
The political unrest in Egypt, which threatens to destabilise the oil-rich Gulf region, could see Australia’s diesel prices rise.
CommSec’s chief economist Craig James says the turmoil will likely have an effect on oil prices by adding more pressure for increases at the consumer level.
“In the last couple of days the unrest in Egypt has been one of the major concerns; it did look as the prices were going to settle between $80-90 a barrel but because of the situation we’ve had a sharp jump in the oil price,” James says.
“The key concern is the canal and the potential for the oil shipment to be disrupted.”
If the Australian dollar continues to remain strong that will keep the fuel prices relatively low, James adds.
“It depends how long the unrest goes for; it may be tonight that the situation gets resolved and the prices will quickly retreat. It’s just something that we can’t call,” he says.
Meanwhile, supermarket giant Coles’ increase in petrol prices to cover the cost of discounting bread will have no impact on diesel prices, petrol price monitoring agency FUELtrac Managing Director Chris Kable says.
“Diesel is affected mainly to what’s happening to the international prices, so most of the concerns are related around unleaded,” he says.
Coles’ petrol price rose to $1.49 a litre when the Shell wholesale price had come down to $1.24, Kable says.