Guyoil increases Gas prices as OPEC, others agree to limit oil output

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Effective today, January 2, 2017 the prices for Gasoline and Kerosene, among others at the pumps will be increased as Guyoil has adjusted their prices based on the increases in oil prices on the world market.

According to Guyoil in a statement “while Kerosene and Gasoil prices have been increased by $5.00 per litre, respectively, Gasoline prices have moved upwards by $12.00 per litre. These increases are directly related to increase in acquisition cost from source and are consistent with trends in the upward movement of world market price for petroleum products.”

Guyoil said it had reduced the price for gasoline in October 2016, which was consistent with their policy of “passing on favourable prices to the Guyanese populace whenever possible.”

Collusion to drive up prices

For the past two years oil production has proliferated, resulting in an oil surplus on the world market which has led to a steady decrease in the value of crude oil, in fact the price for a barrel of crude oil had halved due to the supply overhang.

This decrease however, while a boon to consumers -as world and local prices for oil would invariably drop- is seen as detrimental to oil producing countries as revenues from oil would decrease, having a negative effect on their economies.

As such, the oil cartel, Organization of the Petroleum Exporting Countries (OPEC) and other non-OPEC countries such as Russia, among others, have agreed at a recent meeting to cut the production/ output of oil in a effort to curtail supply and increase demand, thereby increasing the prices for barrels of crude oil.

OPEC had said that it would agree to limit crude oil output to a maximum of 32.5 million barrels per day (bpd) starting January 1 for six months, while other non-OPEC oil producers have pledged to cut their output to drive up prices.

Consequently, oil prices on the world market had already started to increase significantly with news of the impending output cuts, with crude oil reaching its highest as of last month at approximately $US 55 a barrel.

 

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