Benchmark West Texas Intermediate this month dropped to less than US$35 a barrel before recovering some ground to be trading yesterday at US$37.88 – about 29 per cent below where it was a year earlier.Oil prices are more than US$100 a barrel lower than the record high of US$145 a barrel recorded in 2008.
AA PetrolWatch this month estimated the national price of 91 octane petrol to be $1.85 a litre which is about 4.6 per cent lower than a year earlier although certain service stations have run temporary discounts at lower prices.
Tempting though it might be to blame profiteering oil companies for the apparent discrepancy the answer is more complicated than that.
The first piece of the puzzle is the exchange rate.
Not so long ago – July 2014 – the exchange rate was over US88c – affording the country something of a buffer for high oil prices at the time of about US$110 a barrel.
Now the exchange rate has come down and so have oil prices.
If the exchange rate was the same as it was then petrol prices would be 50c a litre less than where they were a year ago – AA PetrolWatch spokesman Mark Stockdale estimated.