Petrol prices are nearing all-time highs in many countries around the world as surging demand and supply shortages send global oil prices to a near three-year high.
In 2001, the global average price of petrol was about $0.60 a litre, and filling an average family sedan cost about $30. Today it is $1.20 – $30 will buy you half a tank.
High fuel prices are part of a global energy crunch that has led to big disruptions across China, the United States, the United Kingdom and Europe. Petrol and diesel prices have also spiked in several countries including India and South Africa.
As of September 2021, Hong Kong has the most expensive petrol in the world at $2.56 per litre ($11.63 per gallon) followed by the Netherlands – $2.18 ($9.91 per gallon) and the Central African Republic – $2.14 ($9.72 per gallon). High taxes largely contribute to the high cost at the pump.
The countries with the cheapest petrol include mostly oil-rich countries including Venezuela at $0.02 ($0.09 per gallon), Iran – $0.06 ($0.27 per gallon) and Syria – $0.23 ($1.04 per gallon) according to globalpetrolprices.com.
How crude oil becomes petrol
Petrol, diesel and various other fuels are made from crude oil – a yellowish-black fossil fuel that is pumped out of the ground. Many household products including plastics, detergents and clothing are also derived from the non-renewable resource.
Higher crude prices have a knock-on effect on several industries, from transport all the way through to manufacturing.
Crude oil is graded according to thickness (heavy, intermediate and light) and sulfur content (sweet – low sulfur, sour- high sulfur). Light, sweet crude oil is the highest grade. It is easier and cheaper to refine, making it the most sought after.
Brent and WTI are the global benchmarks for light, sweet crude oil. Brent is drilled out of the North Sea between the UK and Norway while WTI (West Texas Intermediate) is sourced from US oil fields.
Once the oil has been extracted and transported to various oil refineries, it must be heated in a furnace then distilled into various fuels and products. Lighter products including liquid petroleum gases require lower temperatures to extract while the heaviest products including asphalt are extracted at much higher temperatures.
How the price of petrol has changed (2001-2021)
The price of petrol at the pump depends on various factors, including the price of crude oil, transport costs, state taxes and distribution costs.
In 2001, Brent crude was trading for about $25 a barrel. One barrel is equivalent to 42 gallons or approximately 159 litres.
At its peak in 2008, Brent cost some $140 a barrel before crashing down to $45 after the global financial crisis, which destroyed demand for energy.
In April 2020, the price of oil once again plummeted to record lows as the COVID pandemic swept the globe, prompting nationwide lockdowns and very weak demand.
By September 2021, surging demand coupled with supply shortages has sent crude prices to a near three-year high at approximately $80 per barrel. Analysts at Goldman Sachs expect Brent crude to hit $90 a barrel by the end of the year.
OPEC members’ oil reserves
Central to the world’s oil production is OPEC – the Organization of the Petroleum Exporting Countries. Established in Baghdad, Iraq in 1960, this multinational organisation comprises 13 nations that collectively possess about 80 percent of the world’s proven crude oil reserves.
OPEC member countries produce about 40 percent of the world’s crude oil and represent some 60 percent of the total petroleum traded internationally, according to the United States Energy Information Administration.
OPEC sees oil demand returning to pre-pandemic levels in 2022 and expects output to grow by 1.7 million barrels per day in 2023.
Venezuela has the world’s largest proven oil reserves at 303,806 million barrels followed by Saudi Arabia with 258,600 million and Iran with 208,600 million according to OPEC’s 2020 annual statistical bulletin.
Which countries have the most oil?
Venezuela, Saudi Arabia and Iran have half of the world’s 1.55 trillion barrels of proven oil reserves. The largest reserves among non-OPEC countries include Russia (80,000 million barrels) and the US (52,637 million barrels).
In 2019, the world consumed 99.7 million barrels of oil per day (mbpd) according to the International Energy Agency. The US alone consumes about one-fifth (20.48 mbpd) of the world’s daily oil consumption followed by China (13.07 mbpd) and India (4.84 mbpd).
According to OPEC’s Secretary-General Mohammad Barkindo, oil will retain its number one position in the global energy mix, providing 28 percent of global energy needs by 2045.
TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
