Up to NO the rise in petrol products prices was based on a steady and probably controlled rise in crude (and high taxation on processed petrol products here and in Europe - see below). NO and the current threat on the Texas refineries is NOT controlled and possibly may cause a much more serious recession than might have been planned (if it was). Don't forget that the meaning of a significant decline in availability of petrol products in the US is a world wide energy crisis and that once rolling may be a tough ball to control.
Following petrol prices in Europe: The weekend of Sept. 3rd/4th petrol prices went up in the EU area by some 15 cent/litre, for instance in Finland one litre of 95 octane petrol now costs nearly € 1.50, which corresponds to $ 7.30/gallon. Petrol prices in the UK are approaching £1 per litre. Diesel has crossed that line at many petrol stations. One must take into account of course the divergent tax policies of various European State. The average cost of petrol for the Brits last month (August) was 96.5 pence per litre, the Dutch 100.3, the Norwegians 94.5 while the Spanish did very well with 66 pence per litre and the Greeks with an amazingly cheap price of 65.7 pence/litre. See http://www.see-search.com/business/fuelandpetrolpriceseurope.htm for more on this.
With the 15 percent rise in petrol prices the English may well be paying more than a pound per litre, the Dutch 116 pence/litre, the Norwegians a bit more than 100, and the Spanish and the Greeks will be paying somewhere around 76 pence/litre. A pence equals somewhere around 1.79 cents and a litre is 0.22 gallons. The Greeks are now paying about $6.05 per gallon!
Anyone following petrol prices in Asia and "Eurasia"? Victor
----- Original Message ----- From: "Doug Henwood" <dhenwood at panix.com> To: <lbo-talk at lbo-talk.org> Sent: Thursday, September 22, 2005 20:35 Subject: RE: [lbo-talk] Poltical effect of Hurricane Rita
> Mark Bennett wrote:
>
>>Really? Here in California gas had been over $3.00 p/g steadily for
>>nearly a month, and last week it just fell back below that benchmark.
>>We're that close to the "breaking point"?
>
> Every time gasoline has spiked like this, there's been a recession. A
> complicating factor is that prices for refined products have risen much
> more than underlying crude prices (in earlier spikes, like 1974 and 1980,
> it was the reverse). Still, with energy prices up strongly (and natgas is
> up like crazy too) and the Fed tightening, it doesn't seem outlandish to
> expect a recession, or a near-recession, in 2006. I don't know if that
> qualifies as a "breaking point" though. But I suspect the Fed may be
> trying to engineer something like a recession, to burst the housing bubble
> and get energy demand down.
>
> Doug
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