Fuel Price Hike Could Last Five Years Amid Refining Disruptions
Rising fuel prices are likely to persist for at least five years due to multiple factors affecting the market, according to Tasmanian economist Saul Eslake. The spread between crude oil prices and refined product prices has more than tripled, reflecting increased refiners' profit margins.
Eslake pointed out that while crude oil prices have briefly fallen below $US100 a barrel, the 'crack spread', or the difference between crude oil prices and refined product prices, remains high. This is due to disruptions in refining capacity, particularly in the Persian Gulf region and Ukraine.
MeOH Energy CEO Michael Spencer emphasized that having access to crude oil and reliable shipping are crucial for producing diesel fuel, which is currently facing constraints. The situation may worsen if US exports intended to protect domestic consumers reduce the global supply of refined products.