With the falling global crude oil prices, Botswana petroleum products users are continuing to get the positive impact as government passes the lower cost benefits to them. The country’s Ministry of Minerals, Energy and Water Resources said the retail pump prices for petrol, diesel and illuminating paraffin were slashed in response to declining crude oil prices.
According to the Ministry, retail pump prices for all petrol grades (unleaded petrol 93 and 95) be decreased by 15 thebe per litre; retail pump prices for all diesel grades (diesel 500 ppm and 50 ppm) be decreased by 45 thebe per litre; retail pump price for illuminating paraffin be decreased by 55 thebe per litre while the Road Fund Levy increased by 20 thebe per litre.
“The decrease is due to a general decline in international crude oil prices and refined product prices. Average crude oil prices have been falling mainly due to oversupply and weak global oil demand. There has been persistent oversupply with strong signs of slowing pace of economic growth in consumer countries such as China,” government said.
“The Government will continue to closely monitor the development of petroleum products prices in both regional and international markets. This will enable Government to take more appropriate and informed decisions to ensure optimal price control to both the general public and the fuel supply industry.”
Oil prices have fallen to less than US$30 abarrel with a number of analysts warning oil producers to prepare for life with a US$20 a barrel oil prices.
The U.S Energy Information Administration (EIA) said on its short term outlook that Brent crude oil prices average $40/b in 2016 and $50/b in 2017. Forecast West Texas Intermediate (WTI) crude oil prices average $2/b lower than Brent in 2016 and $3/b lower in 2017.
However, the EIA noted that the current values of futures and options contracts continue to suggest high uncertainty in the price outlook.
“For example, EIA’s forecast for the average WTI price in April 2016 of $37/b should be considered in the context of recent contract values for April 2016 delivery (Market Prices and Uncertainty Report) suggesting that the market expects WTI prices to range from $25/b to $56/b (at the 95% confidence interval).”