Steep rise in British oil price

The Rhodesia Herald,
June 2, 1968
PRICES for British oil from the North Sea rose yesterday. British Petroleum lifted the price for oil from its Forties Field by US$2,45 a barrel. The new price of US$20,70 a barrel represents a 48 percent increase above what the partly State-owned company was charging in the last quarter.

The State-owned British National Oil Corporation later announced that it was raising its North Sea price in line with British petroleum.

Exxon, which also drills in the North Sea, has said, however that it does not expect to raise the price of its oil from the area, reports Iana-Reuter.

The Forties Field produces more than half a million barrels of oil a day. It is high quality light crude and the new price being charged by BP and BNOC is just below the highest at present being charged in the world for that type of oil.

Iana reports that Britain’s Energy Secretary, Mr David Howell, has warned that the oil must be saved “urgently and immediately”, because supplies are going to become tighter and dearer.

The major oil companies operating here have already reduced their deliveries by up to 20 percent because their stockpiles are dwindling.

Mr Howell said the cuts emphasised the seriousness of the shortage, caused by the Iranian situation and the recent steep price rises.

He gave no indication that Government was about to launch any official rationing schemes and said: “Saving cannot simply be done by gimmicks or lectures.”

 LESSONS FOR TODAY

Oil is an important international commodity whose prices are sensitive to transitional shocks like the Russia-Ukraine war which has resulted in fuel prices skyrocketing across the world.

Countries need to always have surplus supplies to create a buffer in cases of global volatilities wreak havoc on prices.

Countries and car manufacturing companies need to continue expediting the development of alternative sources of energy such as electric and solar cars that are less affected by transitional shocks as fuel.

Hybrid cars manufactured by leading car manufacturers such as Toyota and Honda are already making a positive impact in the market.