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13.11.2007 Business & Finance

Petrol Prices Go Up Again?

By Daily Guide
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The continuous rise of crude oil prices on the world market is expected to force the National Petroleum Authority (NPA) to increase petroleum prices again for next month.
CITY & BUSINESS GUIDE gathers that fuel prices are expected to go up highly.

Normally, price of oil on the world market reflects the change in fuel prices after two or three weeks. Crude oil was hovering around $92 per barrel some two weeks ago with analysts predicting a $100 mark before the end of the year.

Last Week, Kwadwo Baah Wiredu, Finance and Economic Planning Minister expressed worry about the increasing cost of crude oil on the world market which has hit record level of $97 per barrel.

He revealed that government used an average estimate price f $65 per barrel for crude oil importation in the budget statement for 2007 with the actual price increasing nearly 50 per cent above the estimate.

The more than half adverse variance relating to the country's energy needs substantially increased the import bill of crude oil and threatens to push pressure on the external reserve of the country.

Due to government's policy of deregulating the petroleum sector, prices of petroleum products are reviewed at the end of every month.

The ever-weakening dollar and fresh worries about winter fuel supplies have also sent US oil prices past $98 a barrel.

With global crude prices further lifted by bad weather hitting North Sea oil rigs, US light crude touched as high as $98.62 in last week's trading.

London Brent crude also increased, hitting a new high of $95.19.
The weaker dollar has been driving up oil prices because some investors have been using the commodity as an alternative to holding dollars.

Meanwhile the dollar's current weakness has also seen prices of other commodities rise sharply, most notably gold, which is continuing near 27-year highs.

Gold prices have also been lifted by the higher cost of oil, as investors see it as a haven against the inflation risk caused by increased crude costs.

By Charles Nixon Yeboah

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