Curaçao, 29 June 2015
The Bureau Telecommunication & Post (to be referred to hereinafter as: the “Bureau”) has found that relative to the recent announcement of the adaption of the tariffs for Mogas 95 and Low Sulphur Diesel (LSD) for July 2015, the question regularly arises how this adaptation is related to price of crude oil on the world market. With this press release the Bureau therefore provides additional information on this point in the press release of June 26, 2015 in which an elucidation was already given respective to the adaptation of fuel prices for July 2015.
Crude oil is an essential raw material (element) for producing the various refined petrochemical end products, such as Mogas 95 and LSD. As such there is a relationship of course between the price of crude oil on the world market and the price of the refined end-products. The prices on the world market for the refined products, as determined by the Platts, as well as for crude oil (See WTI quotations on -for example- www.eia.gov are therefore closely monitored and registered on a monthly basis by the Bureau.
Although the development of the price of crude oil is an important factor in the development of the refined products, this development is not quite equal. The prices for refined fuels namely have their own specific price development which is influenced by the supply and demand of the specific refined fuel product. So the price development of the refined product Mogas 95 may thus deviate from the price development per barrel of crude oil. In the overview at the bottom of this page this is represented by facts and the regulated purchase prices as well as the end user tariffs for Mogas 95 on Curaçao which are also lined up.
From this overview two important facts may in any case be ascertained:
- There is not a one-on-one relationship between the development of the price of crude oil (WTI) and the Platts quotations for Mogas 95. This, for example, becomes apparent from the price of crude oil of approximately USD 59 per barrel in the months of December 2014 and May 2015, whereas in those same months the Platts quotation for Mogas 95 amounted to respectively NAF. 0,74 per litre and NAF. 1,00 per litre. Another clear example is to be found for the months of January and March 2015.
- The current Platts quotation for Mogas 95 is high at the moment, as compared to the price of crude oil (WTI). From the examples mentioned here, it is evident that the Platts quotation for Mogas 95 is relatively high as compared with an earlier comparable price of crude oil (WTI).
Finally it is also visible from the above-stated overview that in the currect regulation of the fuel prices in Curaçao there is an administrative delay of approximately two (2) months (see also the press release of June 26, 2015). The regulated purchase price (4th column in the overview) which is determined on the basis of the purchase invoices of Curoil, is always to be compared with the Platts quotation for Mogas 95 (3rd column) of the two preceding months. So, for example, the regulated purchase price of June 2015 is comparable with the Platts quotation for Mogas 95 of April 2015. The differences between the two, for that matter, originate from contractual agreements between Curoil and its supplier and the fact that the figures stated in the above overview reflect averages.
The conclusion being that although the development of prices on the world market for crude oil may play an important role in the development of fuel tariffs, a direct one-on-one comparison is not possible. In addition it should be remarked that the purchase price of the refined product Mogas 95 is relatively high at the moment.
*Barrel: 159 liter