2023 starts with a drop in diesel prices |25 January 2023
Diesel users in Seychelles are seeing a significant drop in prices at the pumps as of January 23, 2023, as a result of a decrease in global diesel prices and a relatively stronger rupee working in consumers’ favour.
According to the latest weekly price released by the Seychelles Petroleum Company (Seypec), diesel came down to R22.73 per litre since this week by dropping R1.15 per litre. Most people will recall the high price of diesel which was at R25.61 in June last year. With reductions in global prices, Seypec has managed to gradually reduce the prices of diesel at the pumps by R2.88 per litre since June last year. This is refreshing news for owners of public transport and goods vehicles, hotels generating their own electricity, industries, and the Public Utilities Corporation (PUC) on Praslin.
Diesel prices skyrocketed last year amid the energy crisis caused by the Russian/Ukraine war and the global shortages that had prompted diesel prices to remain fervently strong.
On the other hand, motor gasoline prices at the pumps dropped in November 2022 and has remained stable to guarantee the price tag of R20.93 for nearly 3 months.
“The main driver behind the lower projected prices is a drop in the international product prices for petroleum, which are guided by global oil movements,” Sarah Romain, acting chief executive of Seypec told Seychelles NATION.
“Global oil prices have continued to drop, especially in the last month of 2022, with the spot price of brent crude currently $87 a barrel. Consumers will recall that crude oil (brent) had reached just under $130 a barrel in March of 2022.
Seychelles stable energy prices
According to Seypec, the latest price development of energy products is the result of a combination of world outlook, monetary benefits, and operational efficiency.
“First, we have been able to secure lower costs on recent cargoes due to falling world prices,” Mrs Romain explained. “Second, the Seychelles rupee continues to trade favourably against the US dollar, amid a strong economic recovery and the tourism industry faring well during last year. This monetary element adds to relive the pressure on the prices and helps to stabilise rates at the pump. Third, we manage our imports and stocks in such a way that we can guarantee prices for longer periods. We even expect prices to get lower by the end of February and Seypec will of course pass on all benefits to users.”
In terms of regional comparison, Seychelles motor gasoline prices is still among the cheapest in the region.
Despite this relatively calm and positive situation, caution must be observed during the coming months. Risks for importing countries like Seychelles are that 2023 will be another strong year for the oil industry as shipping freight increases and demand for oil and gas is expected to increase.
“The energy industry operates in a cyclical market and is subject to volatile commodity prices. The sanctions being imposed on Russia by the EU and G7 countries will impact oil trading routes and will likely stress the oil market and push prices up,” Mrs Romain added. “China is reopening, and most observers expect a rebound in oil and gas demand to come sooner rather than later. Even the U.S., for all its green ambitions, is unlikely to stop being the biggest consumer of oil in months.”