Petrol Price Rises

Mobil is putting up the price of petrol by 3 cents a litre from midnight tonight. While in the US, petrol companies increasing prices are being accused by officials of price gouging. John Howard reports.

Mobil says rising crude oil prices have now levelled out at close to US$25 a barrel and refined products are keeping pace with this cost.

A company spokesperson says it has worked hard to keep the prices at their current level since crude prices started going up late last year.

But as costs are showing no signs of coming down at the end of the holiday period the spokesperson says the company has no choice but to increase prices.

BP has indicated that it too would raise prices along with Challenge and Caltex.

Meanwhile in the US, which has been hit with sudden winter storms on the East Coast, prices for heating oil, diesel and petrol are sky-rocketing.

This has caused Attorney's-General in several states to start inquiries.

While some people accept the supply-and-demand theory, others are suggesting there is price-gouging going on.

Connecticut attorney-general, Richard Blumenthal, said, "We have clear indications there are surcharges on bills, nondelivery of product, possible anti-competitive actions in not keeping up or withholding oil supplies and a lack of required notices of shortages - all of which may show violations of law."

Thomas Prestcott of Prescott & Co, a petrol and oil distributor in New Hampshire, said, " There is no war in the Mideast, no refineries are down, there is no explosion in the market. It is a normal winter in terms of degree days, and a cold snap of six to eight days should not force up prices one nickel."

He said any so-called shortage is one created to make money.

President Clinton, after being inundated with pleas for help from several state officials, directed an emergency release of home heating assistance funds.

While the help is welcome some people are saying it also rewards the oil companies with taxpayer subsidies and does not bring prices down.

Chevron Corp, the second largest oil firm in the US, has just reported fourth-quarter earnings surging higher than last year and beating analyst's estimates. Full year 1999 revenue was US$35.45 billion, up 16 per cent from 1998.

Last Monday the AA was calling on New Zealand petrol companies to prove their predicament - before the next petrol price hike which had been signalled earlier.

At the time the oil companies blamed a colder than expected northern hemisphere winter and a drop in oil production for increasing New Zealand prices. But this latest US information doesn't appear to bare that out.

© Scoop Media