Jan 8, 2009

Crazy fuel prices and Euro / USD in 2008

Safari boat operating costs are strongly linked to the fuel price and can reach 25% of whole bills for those safari boats cruising a lot with high cruising speed. In 2008, fuel prices have gone crazy. Before the Olympics in China, it seemed that fuel reserves were dying and world fuel price went from 95usd for a barrel to 145usd in early July. It seemed that the overall world rising demand, along the higher needs from India and especially China, made the oil price hit the roof and sparkle some immediate inflation through all goods linked with transport : i.e food, everyday products, almost anything went up.

2008 - World oil price in USD

After the Chinese Olympics, the world financial crisis started to slow down the economy and the trend went so fast over the fall, that late December the fuel went down below 40usd, which is more a 300% decrease in 6 months ! It took a while for the fuel in Malé to decrease. After the last increase in June 2008 where a liter of fuel was 17.75 Rfs, it decreased 10 times over the second half of 2008. According to STO, it went down to 7.4 Rfs on November25.If the fuel price has decreased much, it seems that everyday goods have kept progressing and food is now more expensive in maldives despite the fuel price decrease. How come ?

2008 - Euro / USD rate

Another main factory for the Maldivian tourism economy based on 65% of european tourism is the euro rate. And it's been a year of yo-yo ! The Euro started in 2008 around 1.45 / 1.50 and made a quick ascent in spring, reaching 1.60usd late May and again in mid-august. Then, the financial and economical crisis through the european economy made the euro lose a lot of power against the dollar. It looks like investors have been playing with currencies so they can get the benefits they don't get anymore on companies, which have been losing a lot of their values. The lowest was hit late October and late December at 1.23usd. Since early December, the euro has gained power again and the main feature has been the almost parity of euro and british pound (now it's back to 1 euro = 0.90 pound). On Mid-December, the euro hit a peak at 1.47usd and went back early January in the 1.35 / 1.40 range, which will according to experts, should be the average rate for 2009. But as the same experts point out, fragility will be high and ups and downs will be significantly dramatic. So for those who have to pay their bills in Euros or dollars, you'd better keep an eye on that exchange rate.