Diesel prices are soaring in Europe and the US, spurring a fresh bout of inflationary pressure ahead of a winter that is expected to see major supply disruption.
Diesel prices are soaring in Europe and the US, spurring a fresh bout of inflationary pressure ahead of a winter that is expected to see major supply disruption, writes Bloomberg.
In the US, inventories are perilously low ahead of the winter season. It’s the same story for independent stockpiles held in Amsterdam-Rotterdam-Antwerp, northwest Europe’s oil trading hub. Consumption of heating oil – a diesel-type fuel – typically rises in winter, reported Bloomberg. For now, though, the possibility of more volatility remains. Prices jumped above the equivalent of $220 a barrel shortly after Russia’s invasion of Ukraine earlier this year, Bloomberg said.
In South Africa, diesel prices have not benefitted from oil’s recent declines in the same way that petrol prices have. Brent crude oil dropped from $105 per barrel to $94 per barrel in September. This saw petrol prices slashed by more than a rand for October, but not for diesel. The rand, meanwhile, is also on the back foot against the dollar, having weakened quite significantly over the past few weeks.
The rand traded at around R18.25 versus the dollar in the afternoon session on Wednesday – the weakest point against the greenback this year, and only around a rand stronger than the historic weak point in April 2020, as the US dollar continues to climb to its high of the early 2000s, according to Annabel Bishop, the chief economist at Investec Bank.
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