GPP Quarterly Global Petrol Prices Bulletin April-June 2015 GlobalPetrolPrices.com Q2 2015
Highlights In Q2 2015, the price of crude oil gradually rose by 10%, with Brent average of nearly USD 63 per barrel and WTI average of around USD 57 per barrel. The average price of gasoline in the nearly 100 countries we observe increased by 7% reaching USD 1.11 per liter in the last week of June. Depreciating currencies, distribution delays, and new taxes contributed to sharp fuel price increases at the pump in some countries. Forecasts by the International Monetary Fund (IMF) and visitors to GlobalPetrolPrices.com point to sustained or lower crude oil prices in the near future. Crude Oil Price Development The average price of Brent crude oil for the second quarter of 2015 was USD 62.89 per barrel and the average price of WTI Crude oil was USD 57.16 per barrel. The overall trend was slightly increasing. In the first week of April the Brent oil price was USD 56.41. In the following weeks it rose reaching a peak of USD 66.46 in early May. Then the Brent price started to decline slightly and in late June it was USD 62.01. The total price increase for this quarter was 10%. The greatest weekly change was observed in mid-april when the Brent oil price increased by 9.5% as the conflict in Yemen escalated. The WTI oil price exhibited similar dynamics during the period. Crude Oil Price Development Q2 2015 70 65 USD per barrel 60 55 50 45 Brent Crude Oil Price WTI Crude Oil Price Source: GlobalPetrolPrices.com 2
World Average Gasoline Prices To capture the relationship between the crude oil price and fuel prices we calculate a world average price of gasoline, the GPP Benchmark. The GPP Benchmark is a weighted average of the retail prices of gasoline 1 in 93 countries around the world using the relative volume of the petroleum products consumption. These countries account for over 90 percent of the global consumption of oil products. The Benchmark is measured in US dollars per liter of fuel. 68 World Average Gasoline Price Development Q2 2015 1.14 USD per barrel 66 64 62 60 58 56 54 52 1.12 1.10 1.08 1.06 1.04 1.02 1.00 0.98 USD per liter Brent Crude Oil Price Source: GlobalPetrolPrices.com Week in 2015 World Average Gasoline Price As can be expected, the GPP Benchmark followed the changes in crude oil prices. It rose from USD 1.03 per liter in the first week of April to USD 1.11 per liter in the last week of June. The total increase for the second quarter of 2015 was 7%. The gasoline price growth was smaller than the increase in oil prices as other factors, mainly excise taxes that are stable over time, also influence the pump prices. Notice that the sharp increase in crude oil prices in April did not automatically lead to an increase in retail gasoline prices. Similarly, gasoline prices increased in June despite stable crude oil prices. Overall, crude oil prices are more volatile than the GPP Benchmark and it takes about 3-4 weeks for changes in oil prices to work through to the retail level. 1 We collect price data on unleaded gasoline with 95 octane number (RON). This type of gasoline is widespread across the world and hence we use it for comparability reasons. In most developed countries, gasoline 95 is the fuel with the lowest octane rating but it is also present in the developing world where it often happens to be the high-octane fuel on the local market. 3
Fuel Prices around the World In the second quarter of 2015 the country with the lowest fuel prices continued to be Venezuela where fuel is heavily subsidized. Gasoline and diesel are sold at very low retail prices in other major oil-exporting countries such as Libya, Saudi Arabia, Kuwait, and Algeria where a liter of gasoline cost on average about USD 0.23 per liter. Countries with the lowest gasoline prices, Q2 2015 Countries with the lowest diesel prices, Q2 2015 Venezuela 0.02 Venezuela 0.01 Libya 0.12 Saudi Arabia 0.07 Saudi Arabia 0.16 Libya 0.11 Kuwait 0.22 Algeria 0.14 Algeria 0.23 Iran 0.17 Qatar 0.23 Egypt 0.24 Bahrain 0.27 Ecuador 0.28 Oman 0.31 Turkmenistan 0.32 Sudan 0.34 Oman 0.36 Turkmenistan 0.35 Kuwait 0.36 0.00 0.20 0.40 Gasoline Retail Price (USD per liter) 0.00 0.20 0.40 Diesel Retail Price (USD per liter) Source: GlobalPetrolPrices.com The highest gasoline prices were in Norway where a liter or gasoline cost about USD 2 per liter. Overall, in the ten most expensive countries, the average gasoline price was about USD 1.85 per liter or 8 times higher than the fuel prices in the ten least expensive countries. Prices in the largest economy, the US, were on the low side with an average of USD 0.79 per liter of gasoline. In most countries with high fuel prices the retail fuel market is liberalized and the high fuel prices are due to high tax rates. In a few countries, such as Bermuda, high local fuel prices are the result of high distribution costs. 4
Countries with the highest gasoline prices, Q2 2015 Countries with the highest diesel prices, Q2 2015 Norway Hong Kong Bermuda 2.01 1.96 1.95 United Kingdom Norway Israel 1.89 1.82 1.77 Netherlands 1.93 Switzerland 1.71 Italy 1.84 Bermuda 1.66 Denmark 1.83 Italy 1.66 United Kingdom 1.81 Sweden 1.63 Israel 1.77 Malawi 1.60 Monaco 1.77 Iceland 1.60 Djibouti 1.75 Denmark 1.56 1.50 2.00 Gasoline Retail Price (USD per liter) 1.50 2.00 Diesel Retail Price (USD per liter) Composition of gasoline prices The largest difference between fuel prices in different markets comes from taxes, environmental surcharges, and other levies imposed by governments. As a rule of thumb, European countries have high taxation factored into retail prices while in the United States what you pay at the pump depends primarily on crude oil prices. To see the weight of taxation, GlobalPetrolPrices.com has prepared a breakdown of gasoline prices in the US, Brazil, Australia, Germany, and Russia. Follow this link to see the result on a chart. International Fuel Price Trends The table on the following pages shows the end-of-period gasoline and diesel prices and the cumulative percent change during Q2 2015 for various countries. The overall trend was upward but in most countries the price changes were small and in line with the modest increase in oil prices during the quarter. There were a few exceptions with more significant price increases. The depreciating shilling in Tanzania pushed fuel prices up as it raised the domestic value of imported oil products. The rising crude oil prices and delays in the supply of petroleum products led to large price increases in Panama, El Salvador, and Nicaragua. The price increase in Vietnam was the result of a new tax on fuels. 5
Gasoline Diesel Price, lc Q2 2015 Price, lc Q2 2015 Country Currency June 30, 2015 change June 30, 2015 change Albania ALL 182.00 4.6% 181.00 4.6% Andorra EUR 1.16 4.0% 0.99-0.1% Argentina ARS 12.20 4.1% 11.14 4.1% Australia AUD 1.41 5.1% 1.35 3.1% Austria EUR 1.29 5.8% 1.17 2.1% Azerbaijan AZN 0.80 0.0% 0.60 0.0% Belarus BYR 11900.00 0.0% 12300.00 0.0% Belgium EUR 1.46 1.5% 1.22-0.2% Bolivia BOB 3.74 0.0% 3.72 0.0% Bosnia and Herz. BAM 2.15 4.9% 2.10 2.4% Brazil BRL 3.30-0.6% 2.81-0.1% Bulgaria BGN 2.31 5.5% 2.35 2.6% Canada CAD 1.33 13.3% 1.12-3.4% Cape Verde CVE 126.70 19.9% 102.50 13.4% Chile CLP 790.80 7.6% 556.00 3.5% China CNY 7.00 7.4% 6.24 8.1% Costa Rica CRC 643.00 12.8% 514.00 4.3% Croatia HRK 10.45 8.9% 9.42 6.1% Cyprus EUR 1.33 7.2% 1.28 1.4% Czech Rep. CZK 33.09 4.9% 32.95 2.8% Denmark DKK 12.29 1.7% 10.35 0.6% Dominican Rep. DOP 59.57 5.9% 43.64 6.9% Egypt EGP 6.25 0.0% 1.80 0.0% El Salvador USD 1.00 18.4% 0.75 0.0% Estonia EUR 1.18 4.0% 1.13 1.9% Fiji FJD 2.10-9.1% 1.86-7.5% Finland EUR 1.55 4.5% 1.35-1.4% France EUR 1.46 4.3% 1.22 1.3% Georgia GEL 2.19 17.1% 2.07 15.6% Germany EUR 1.46 6.1% 1.22 2.0% Ghana GHS 3.47 13.8% 3.37 15.4% Greece EUR 1.59 4.6% 1.24 2.2% Guatemala GTQ 7.23 12.6% 5.64 5.0% Honduras HNL 24.71 9.8% 18.81 3.5% Hong Kong HKD 15.39 3.4% 11.27 3.2% Hungary HUF 389.20 6.9% 377.30 3.9% 6
Gasoline Diesel Price, lc Q2 2015 Price, lc Q2 2015 Country Currency June 30, 2015 change June 30, 2015 change Iceland ISK 225.60 4.5% 211.30 0.0% India INR 71.56 10.2% 54.76 2.4% Indonesia IDR 9800.00 12.0% 11850.00 4.4% Ireland EUR 1.45 5.1% 1.35 3.8% Israel ILS 6.84 1.9% 6.84 1.9% Italy EUR 1.67 3.3% 1.48 1.6% Ivory Coast XOF 715.00 5.9% 615.00 3.2% Jamaica JMD 141.50 8.1% 126.50 3.9% Japan JPY 141.40 4.4% 117.80 4.1% Jordan JOD 0.84 13.5% 0.50 8.8% Kazakhstan KZT 136.00-2.2% 96.00-3.0% Kenya KES 99.27 8.5% 85.41 9.1% Kuwait KWD 0.07 0.0% 0.11 0.0% Kyrgyzstan KGS 40.50-1.2% 38.00 1.3% Latvia EUR 1.20 7.9% 1.10 0.7% Lithuania EUR 1.26 9.1% 1.16 7.8% Luxembourg EUR 1.25 2.5% 1.07 2.2% Macedonia MKD 71.00 5.2% 55.00 2.8% Malawi MWK 723.60 3.9% 734.60 4.1% Malaysia MYR 2.05 5.1% 2.05 5.1% Malta EUR 1.35 0.0% 1.28 0.0% Mauritius MUR 45.95 0.0% 37.80 0.0% Mexico MXN 14.38 0.0% 14.20 0.0% Moldova MDL 17.70 2.3% 16.45-0.3% Montenegro EUR 1.34 11.7% 1.19 10.2% Nepal NPR 109.00-0.9% 86.50-1.1% Netherlands EUR 1.74 3.0% 1.37 1.3% New Zealand NZD 2.21 9.4% 1.33 8.0% Nicaragua NIO 32.45 17.6% 23.61 1.3% Norway NOK 15.85 2.3% 14.32 0.7% Pakistan PKR 77.79 10.7% 87.12 8.1% Panama PAB 0.94 17.1% 0.69-0.8% Peru PEN 3.58 5.9% 2.53 0.0% Philippines PHP 46.95 13.5% 29.80 5.5% Poland PLN 4.95 7.1% 4.73 1.3% Portugal EUR 1.59 5.3% 1.29 1.6% 7
Gasoline Diesel Price, lc Q2 2015 Price, lc Q2 2015 Country Currency June 30, 2015 change June 30, 2015 change Romania RON 5.83 7.0% 5.59 1.3% Russia RUB 35.84 1.8% 34.28 0.4% Serbia RSD 146.90 7.3% 149.90 3.1% Singapore SGD 2.21 7.3% 1.36 4.6% Slovakia EUR 1.39 7.9% 1.20 1.5% Slovenia EUR 1.37 4.3% 1.23 2.5% South Africa ZAR 13.77 6.8% 11.71 4.3% South Korea KRW 1584.81 4.9% 1369.20 3.3% Spain EUR 1.34 3.4% 1.20 1.8% Sri Lanka LKR 128.00 0.0% 95.00 0.0% Swaziland SZL 11.00 5.8% 11.25 5.6% Sweden SEK 14.19 2.9% 13.40 0.4% Switzerland CHF 1.57 3.6% 1.59-0.6% Taiwan TWD 27.06 7.9% 23.64 9.8% Tanzania TZS 1966.00 19.0% 1782.00 14.0% Thailand THB 35.99 3.8% 25.59-2.1% Turkey TRY 4.77 7.5% 4.01 7.4% Uganda UGX 3450.00 0.0% 2900.00-4.9% Ukraine UAH 20.47 0.6% 19.72-8.4% United Kingdom GBP 1.17 3.8% 1.21 1.8% Uruguay UYU 40.60 0.0% 37.70 0.0% USA USD 0.79 13.4% 0.75 0.5% Vietnam VND 21520.00 19.2% 16230.00 1.2% Zambia ZMK 8.74 15.0% 7.59 15.2% Looking Forward The June forecast of crude oil prices from the IMF estimates a 46 percent likelihood that Brent oil prices will be in the USD 60-69 range in September. The forecast also places a substantial likelihood (32 percent) on the USD 50-59 per barrel range. There is some likelihood (15 percent) of oil prices increasing to the USD 70-79 per barrel range while all other possibilities are not considered very likely. At the time of the forecast, Brent oil prices were around USD 62 per barrel and, according to the IMF forecast, prices are likely to remain in that range or to decline. The relatively high likelihood of prices falling to the USD 50-59 per barrel range is explained by the continued weakness of the global economy and the continued strong production by OPEC member states, the US, and other countries. 8
The IMF forecast is plotted below along with the average forecasts of about 100 visitors to GlobalPetrolPrices.com who provided their own prediction. Every month, we collect oil price expectations from our visitors for the next three months. As uncertainty very much characterizes the oil market, we do not expect specific values but rather price intervals coupled with assumed probability in percent. You can post your forecast here. The forecast of our visitors were close to the IMF prediction with 46 percent likelihood for the USD 60-65 dollars per barrel range. However, the survey respondents placed much lower likelihood on a decline in prices. They expected prices to remain at current levels with a similar likelihood of an increase or a decrease in prices. Note, however, that there was very little agreement between survey respondents. Their predictions varied considerably which shows a high level of uncertainty. 50.00 45.00 The expected price of Brent oil in September, 2015 Likelihood, in percent 40.00 35.00 30.00 25.00 20.00 15.00 10.00 5.00 0.00 GlobalPetrolPrices.com Survey International Monetary Fund Possible ranges for the price of Brent oil, U.S. dollars per barrel As of the writing of this bulletin, Brent prices have declined into the USD 50-59 per barrel range. It remains to be seen if they stay at these levels by September. The forecasts and the latest crude oil market developments suggest that, globally, retail fuel prices will remain stable or will slightly decrease (all other factors being equal). About GlobalPetrolPrices.com We track retail fuel prices around the world using data from government institutions, regulatory agencies, major media sources, and oil companies. The data are collected on a weekly basis for close to 100 countries that account for over 90 percent of the global consumption of oil products. We publish the GPP Benchmark of fuel prices and implement a monthly forecast 9
survey on oil prices. Our data sets and analyses have been used by a wide range of international organizations, corporations, journalists, analysts, academics, and others. Join us on Facebook, Twitter, and LinkedIn where we post new data, news, and research. For inquiries or comments, please write to neven.valev@globalpetrolprices.com. 10