Oil prices surge overseas and locally during 5-year period

With yet another increase in petrol prices announced earlier this week and world market prices hovering close to US$93 a barrel so far this month, analysts are expecting further increases, adding to the soaring cost of living for Sri Lankans.

An analysis by The Sunday Times FT on local prices vis-à-vis world markets shows that from March 2003 to January 2008, the price of petrol in Sri Lanka has increased from Rs.53 to Rs.127, doubling over the 5-year period. World crude oil prices have increased from US$29.73 a barrel in January 2003 to US$92.93 a barrel in January 2008. During this 5-year period, local oil prices have increased by 139% but world prices have far exceeded that, increasing by 283%. Local petrol prices in 2003 stayed constant, fluctuating by just one to two rupees during the months of March and November. According to data from local pump stations, the highest petrol prices reached in 2003 was on April 26 and September 5 at Rs.54.

During the months of April and September 2003, world oil prices were US$23.59 and US$24.65, respectively. In October 2003, world market prices hit US$26.96 but prices in local prices actually decreased from September 5 to October 6 from Rs.54 to Rs.52.

In 2004, local prices showed steady increases throughout the year. In January, petrol was Rs.55 and increased steadily to Rs.70 by 25 September of the same year.

World market prices also increased from January to September 2004 from US$28.74 to US$39.80

From May to June 2005, local prices increased from Rs.74 to Rs.80. During those same months, world market prices increased from US$43.67 in May to US$52.55 in June.

In April 2006, local petrol prices were Rs.88 and increased to Rs.105 by September when it started declining where it fell to Rs.92 in October of the same year. World market prices in April 2006 were US$66.85 and had decreased to US$53.58 by October 2006

In January 2007, the local pump price was Rs.97 and continued to increase, hitting Rs.117 by July. During that same period, world market prices also soared from US$50.14 to US$73.69 by July.

This month, the local petrol price reached an all time high of Rs.127 while world market prices also climbed to US$92.93.