By CHRIS GRAEME [email protected]
Demand for fuel in the United States and China has been blamed for an increase in the cost of fuel prices in Portugal.
The holiday period getting underway in the States and a booming Chinese economy have pushed up the price of a barrel of Brent petroleum in Europe to new highs.
In the first half of 2011, the price of fuel has jumped by around 18% while on Monday the price of both petrol and diesel shot up by three cents per litre.
Fuel prices in Portugal between the months of April and May reached maximum levels with diesel fetching €1.44 per litre on average and petrol €1.64 per litre.
Since the beginning of this month, the cost of diesel has climbed 10% and petrol has gone up by almost 9%. Prices at Galp and Cepsa pumps stood at €1.61 per litre of petrol and €1.42 per litre of diesel.
The president of the Portuguese Association of Petroleum Companies (Associação Portuguesa de Empresas Petrolíferas) admitted on Monday that the increases were “significant” and were not “useful for suppliers, retailers or consumers”.
“What we are seeing is a fairly significant reduction in consumption (in Portugal) in both diesel and petrol. Less consumption means less business which is bad news all round as suppliers and retailers see their margins slashed. It’s bad for consumers too since this has a large impact on family and company budgets,” APETRO’s António Comprido told the Lusa news agency.
Jorge Morgado, the secretary general of consumer rights watchdog Deco, argued that the government needed to step in.
“Political power has to get involved in the matter by regulating prices and stopping companies making the profits that they want.”
However, in an interview with TSF radio, fuel specialist Agostinho Pereira Miranda said that the situation in the refining market was behind the increase in fuel prices in Portugal.
He said that despite petrol prices stabilising there were “a lot of fluctuations in the international refining markets”.
“Only last week we learnt that the third largest United States petrol refining company, Conoco-Philips decided not to maintain an integrated scheme for its petrol production and refining operations.”
He said that refining was increasingly less profitable while there was considerable pressure because of the situation in the Middle East, particularly Libya.
“The refineries have passed on their costs to the retailers and therefore the consumers which have been exacerbated in Portugal because Galp has a refining monopoly.
“Galp has also invested over two billion Euros on its new refinery equipment,” he added.
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