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The Russians said today that it would be $250 a barrel in 18 months. What would that do to the price of motor fuel? Double it again?
by asdf on Wed Jun 11th, 2008 at 12:25:27 AM EST
I suspect supply contracts of distilled products ay be pegged to oil futures like natural gas is, so quite possibly.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
by Migeru (migeru at eurotrib dot com) on Wed Jun 11th, 2008 at 02:38:11 AM EST
[ Parent ]
the price of crude represents about half of the price of gas in the US (the rest being refining, distribution costs and taxes), and about a qurter in Europe.

Distribution costs and taxes are more or less constant; refining costs can vary a bit more (in a mostly uncorrelated to oil way), so a doubling of oil prices would, all otehr things equal, lead to an increase of about 50% from today's levels.

But $4 gas does not quite fully reflect $130 oil yes, so you should expect gas to be around $7, probably, with $250 oil.

In Europe, gas is around €1.50/l now, so oil at $250 would presumably put gas at about €2/l.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Wed Jun 11th, 2008 at 04:33:58 AM EST
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