(Seychelles News Agency) - Fuel prices in Seychelles are expected to rise as the cost of crude oil on the international market keeps increasing, a local expert said Tuesday.

The chief executive of Seychelles Petroleum Company (SEYPEC), Conrad Benoiton, told SNA that fuel prices at the pump can reach approximately $1.40 (SCR 19) per litre should international trends continue rising.

The price of fuel at the pump currently is SCR 18.73 ($1.39) per litre. Two years ago, the price was SCR 15.22 per litre.  

According to Bloomberg Markets, the West Texas Intermediate (WTI) crude oil on Tuesday was selling at $64.90 per barrel, up from $60.37 per barrel in early January. WTI is a grade of crude oil used as a benchmark in oil pricing. SEYPEC is buying crude oil at $67.31 per barrel.   

An article from Reuters says that rising fuel prices are due to “an agreement by Organisation of the Petroleum Exporting Countries (OPEC) producers, along with Russia and other countries, on output curbs.”

“We buy oil through a platform that we call Platts that determines the prices of fuel on a daily basis on the market,” said the chief executive.

“We take our cargos in portions and not for three months at an end to avoid being stuck with a price that is either too high or too low, causing one party to suffer. We get our cargo every one or two weeks depending on the amount that we need,” said Benoiton.

He also said that there are other factors affecting local fuel prices one of them being the foreign exchange rate at the Central Bank of Seychelles.

“We need to convert the fuel price into rupees and during this type of transaction, there is this foreign exchange element. If we are to review the rates of foreign exchange since 2014, you would see that we were buying a dollar at 12.45 rupees, today it costs 14.03 rupees which means that this also contributes to the increase in fuel prices,” said Benoiton.

Also included in the local fuel price is $0.59 (SCR 8.59) worth of tax placed by the government as well as the profit that SEYPEC has to make for its expenses, to enable it to keep its stations operational. This represents a margin of 46 percent of the total price per litre.