JANNIE ROSSOUW
INCREASES in the domestic price of fuel are big news in South Africa, with the price of petrol, diesel and paraffin reaching new highs. The underlying reason for the price increases is movements in the international price of crude oil.
The acceleration in the international price of crude oil is linked to the Russian war in the Ukraine.
The expectation is that the crude oil price will remain at an elevated level for the duration of the war.
Internationally, crude oil is priced in US dollar per barrel. Recently the price exceeded US$120 per barrel. This is not the highest level ever for the crude oil price.
The highest ever nominal historic level of US$147.02 per barrel was reached on 11 July 2008. On that occasion the price of crude oil increased owing to military tension about Iran.
Adjusted for inflation since 2008, this amounts to some US$200
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