"I'd put my money on the sun and solar energy. What a source of power! I hope we don't have to wait until oil and coal run out before we tackle that." Thomas Edison, 1931
Now we might be in a spot of trouble – referring to the Iran sanctions imposed by America (supported by Israel) and the resultant rising crude oil prices as South Africa receives almost 25% of its oil from Iran, which is roughly 98,000 barrels per day.
How is the oil price determined? Simple economics – increased demand, same or decreased supply = increased price. Oil is a finite commodity and reserves are becoming all the more scarce.
So why the rise in oil price? Uncertainty with regard to supply based on the Iran crisis.
Possible Effects on SA consumers:
1) Increased Petrol, Diesel and Paraffin prices
2) This directly affects logistics service providers and increases their costs
3) Which in turn effects all consumer goods e.g. food, sports apparel, all industrial manufacturing will be affected because a rise in fuel will increase operational costs
4) Won’t the rise of costs have a direct impact on inflation and possibly lead to an interest rate hike
Has South Africa ever considered importing oil from other countries? Yes they have but the two closest oil producers in Africa, Nigeria and Angola are of little help. Nigeria’s Bonny Light Oil comes close to the specifications that our refineries can use, but Angola’s does not.
Solutions: Maybe its time you considered cycling to work? It would increase the fitness of the general South African and decrease South Africa’s shocking obesity figures (56% of women and 29% of men over 15 years of age). Isn’t it frightening how dependent the world is on one commodity.
http://oilprice.com/Energy/Crude-Oil/South-Africa-caught-in-fallout-from-increased-sanctions-against-Iran.html by John CK Daly of Oilprice.com
http://finance.yhaoo.com/news/oil-dips-g20-sees-130723426.html by Clare Hutchinson a MarketWatch reporter based in London
http://www.health24.com/dietnfood/Weight_Centre/15-51-2954-2955,25364.asp
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