By Marion Ali, Staff Reporter
The price of crude oil in 2016 will fall significantly, based on a forecast by the World Bank, which places these prices at around US $37 per barrel in its latest Commodity Markets Outlook report.
This represents a sharp fall from its October 2015 projection, which had crude priced at US $51 per barrel.
The report indicates that the lower forecast reflects supply and demand factors, early resumption of exports by Iran, greater resilience in US production, a mild winter in the Northern Hemisphere, and weak growth prospects in major emerging market economies.
Oil prices fell by 47 percent in 2015 and are expected to decline, on an annual average, by another 27 percent in 2016, the report said. A gradual increase is expected over the course of the year, however. The anticipated oil price recovery is forecast to be smaller than the rebounds that followed sharp drops in 2008, 1998, and 1986.
“Low prices for oil and commodities are likely to be with us for some time,” said John Baffes, senior economist and lead author of the Commodities Markets Outlook. “While we see some prospect for commodity prices to rise slightly over the next two years, significant downside risks remain.”
The reduction in crude prices worldwide has had a trickling effect on fuel prices at the gas pumps internationally. But in Belize, fuel prices have not been correspondingly low. Financial Secretary, Joe Waight, explained to the media recently that the prices did go down, despite an increase on import duties. “It all depends on the price of oil. We have gotten a relief, you know. It’s gone down since we did a little adjustment on the import duties. It’s gone down again. What’s diesel right now – diesel is at $7.00 or so? It’s gone down than where it was before. Regular and Premium were at $12 at its peak, nuh? So it has gone down, despite the adjustment in taxes”, Waight said.
The world index for fuel shows that Belize remains among the countries with the highest prices in Central America and the Caribbean.