Petrol Prices

Stuff reports:

Petrol prices rose sharply overnight amid warnings it could top $2.50 a litre within weeks if action is not taken to intervene in the oil markets.

A litre of 91 octane now costs to $2.16 overnight, up five cents from yesterday while a litre of premium sits at $2.22. Prices are three cents shy of 2008’s record high prices.

Visiting oil economist Phil Verleger, a former director of energy policy to former United States president Jimmy Carter, warned that the loss of Libyan oil production, because of its uniqueness, could see Brent Crude rise to between US$140 ($190) and US$150 a barrel by next month unless action is taken.

This, he understands, would see the pump price of New Zealand petrol climb by 40 cents a litre.

Hopefully the Libya situation will resolve itself before too long.

You do notice the extra cost at the pump, and it is significant. This will push the CPI up.

If prices do reach $2.50 and stay there for a while, it will be interesting to see how this affects car manufacturers and investment in alternate fuel technologies.  The higher petrol goes, the better the investment alternatives start to become.