Expensive oil may hit Czechs soon

Pavla Hejlová
13. 5. 2008 13:00
Oil prices are projected in prices of all products

Prague - Oil prices have been soaring. Last Friday, US light crude prices exceeded USD 125 per barrel. What does the price growth mean for the Czech market?

In the past, the impact of high oil prices was cushioned above all by the Czech crown's strength to the US dollar and by falling margins. The crown has appreciated about 21% in the last 12 months, but experts said this situation would not last forever, and the Czech market may feel the full effect of growing oil prices soon.

The crown started slowly weakening against the dollar last week. "High oil prices are gradually projected in the prices of all products and services, pulling inflation higher. In the economy, this is particularly visible in transport, energy-demanding production and the chemical industry," says Colosseum analyst Štěpán Pírko.

A few days ago, a weaker crown pulled fuel prices up. The Czech Statistical Office said last Friday that top-selling Natural 95 petrol cost CZK 31.44 a litre, up 64 halers on the week. Diesel oil prices rose by 81 halers to CZK 32.71 a litre.

Hauliers hedging

Transport companies as well as businesses in the chemical industry are trying to hedge against soaring oil prices. "The point is not to make money on the hedging, but rather to know what oil prices I can reckon with during the accounting year," says Raiffeisenbank analyst Aleš Michl.

To cope with the energy price growth, Czech Railways is planning to raise some fares and cancel some discounts as of mid-June. Two in three trains used by the national rail carrier run on diesel.

Czech Airlines (ČSA) last raised its fuel surcharge in November. "At the moment, we are discussing an increase in the fuel surcharge, but we have not decided on the increase to date," says ČSA spokeswoman Daniela Hupáková.

If airlines raise their fuel surcharges, holiday prices will grow as well.

ropa, těžební věž, oil
ropa, těžební věž, oil | Foto: Bleskově

Oil for USD 200? Anything's possible

"Oil for USD 200 may look like a fantasy, but USD 120 per barrel seemed to be equally unrealistic a year ago," says Patria Finance chief analyst David Marek, adding that oil prices could continue to grow under certain conditions. "Many factors are in play on the oil market, ranging from geopolitical risks to speculation through financial derivatives."

Michl said oil prices may reach USD 200 per barrel on a combination of a weakening dollar and deepening inflation concerns.

Pírko also said the USD 200 level per barrel was realistic, though not for this year, as Goldman Sachs analysts have suggested. At such a level and with a weaker dollar, petrol may cost CZK 38-39 a litre, the analyst added.

Adapted and republished by the Prague Daily Monitor


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Na jihu Francie se zřítil visutý most, do řeky spadlo auto a nákladní vůz. Nejméně jeden člověk zemřel

Nejméně jednoho mrtvého a několik zraněných si dnes ráno vyžádalo zřícení mostu nedaleko jihofrancouzského města Toulouse. Oznámil to místní list La Depéche du Midi a informaci o mrtvém potvrdili podle agentury AFP hasiči. Do řeky Tarn se podle médií zřítilo osobní auto a nákladní vůz. Zástupce departamentu Haute-Garonne, ve kterém se zřícený most nachází, uvedl, že neštěstí postihlo tři vozy.

Visutý silniční most, který se zřítil, spojoval obce Mirepoix-sur-Tarn a Bessiéres, jež leží zhruba 25 kilometrů severně od Toulouse. Byl dlouhý zhruba 150 metrů a široký pět metrů.

Zdroj: ČTK
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