Fuel cheapening possible in following months. Analysis by Info-Prim Neo

The spectacular drop in price of oil on the international market has not determined a similar drop of the price of gasoline and diesel oil, retailed in Moldova. Thus, if, on the foreign markets, a barrel of oil has cheapened in less than half a year by over 60%, the fuel price on the Moldovan market dropped by 35% (gasoline), and by 26% (diesel oil). As to fuel price drops, we overcome Romania, our main provider of finite petroleum products! In Romania, the gasoline price dropped 25%, and the diesel oil price – 22%. [Gasoline price reached the level of 2005] “Differences of the rhythms of fuel cheapening on the Moldovan and Romanian markets are explained by the development of currency exchange. Related to the dollar (the currency, in which oil transactions are made), since August till now, the Moldovan leu has depreciated by 7,5% , while the Romanian leu has depreciated by 25% in the same period,” economic analyst Adrian Lupusor said. All in all, after the last cheapening wave, the gasoline price reached the level of 2005, and the diesel oil -- the price of 2007. The firms importing oil for the Moldovan market say that it is extremely hard to anticipate the picture of prices of the main petroleum products, because they are influenced by other factors, as well, not only by quotations on the international stock exchanges. [Importers anticipate growth of fuel price, if excises are raised] “It is impossible to forecast the fuel price for the next period. The quotations of a barrel of oil either rise or fall. The refineries permanently change the formula of calculating the petroleum products, so that to be able to sell profitably the oil, bought at high prices since July,” Victor Ghitu, the executive director of the Moldovan Union of Oil Importers. According to him, it is certain that the fuel at pump will get more expensive by at least 1 leu, if the government increases the fuel excises from January 1. Igor Dodon, the Moldovan minister of economy showed himself more optimistic. He encouraged the local carriers, announcing that by the end of December, new cheapening of gasoline and diesel oil is expected. [Optimistic forecasts] The experts consider that the fuel's cheapening in the next half a year is possible. Generally, the bourse quotations of the oil refers to futures. In some 30 days the oil is delivered to refineries, whee it is processed during other 30 days. So the end user feels the prices going down within two months. “This process the oil goes through explains why the gasoline price reached its climax in September and October, although the oil quotations were the highest in July,” says the analyst Victor Parlicov. Moldova totally depends on the oil imports. The only measure by which the Moldovan state can insure a correct price is to scrutinize the importers and the retailers, so that they do not form cartels, he said. The drop of oil demand in the developed countries because of the economic recession is the most important factor which has led and will lead to further lowering the oil price, experts say. Another factor which will determine the further cheapening of the fuel is reducing the prices by the exporting states.