18 August 2008
editorial
What can be more relieving than the news that crude oil prices once again fell on Friday! The prices are now within striking distance of $100 a barrel, which was breached in February.
Crude oil prices fell to a three-month low on Friday, briefly touching the $111 level after the Dollar muscled higher. OPEC predicted the world's thirst for fuel will next year fall to its lowest point since 2002.
Light, sweet crude for September delivery fell $1.24 to settle at $113.77 a barrel on the New York Mercantile Exchange after falling to $111.34, its lowest since May 2 and more than $35 - or 24 percent - below its July 11 trading record above $147.
An OPEC forecast of lower demand put downward pressure on prices. In its monthly oil report, the organisation forecast world appetite for oil this year overall will fall by 30,000 barrels a day.
It has been predicted that the prices will continue to fall into the new year, as world consumption reduces. Countries have adopted cost saving measures because of escalating crude oil prices of 2007 and the first half of 2008.
As Batswana, we are optimistic that the fall in crude prices will result in a marked reduction in pump prices, which sky-rocketed before they came down by 50t last week.
The escalating oil prices have brought hardships in the lives of Batswana over the last two years, with inflation figures reaching 14.51 percent last month, the highest in the SADC region excluding troubled Zimbabwe.
High fuel prices have led to high costs in other sectors like transport and food. There is every reason to expect government to announce significant fuel price reductions as a result of the good news that is coming from America and the developed world.
We would like to urge traders, supermarkets, transport operators, and service providers who had to raise their prices as a result of sky-rocketing fuel costs to react accordingly.
If the falling oil prices do not result in a fall in prices of essential goods and services, then the improvement in the costs of fuel will only benefit traders and not the average person.
We have realised a trend in the domestic market where prices of essential goods hardly drop even when the circumstances that forced the escalation improves drastically over time. We urge traders to pass price fall benefits to the consumer just as they pass the burden of price hikes.
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