Swiss National Bank president Jean-Pierre Roth has warned that record high oil prices could have a negative effect on Switzerland's reviving economy.This content was published on September 2, 2005 - 18:18
His comments came as petrol prices in Switzerland rose to new highs in the wake of hurricane damage to refineries in the United States.
"Of course the oil price poses a risk to the downside, but it is difficult to measure the impact," Roth told Reuters on the sidelines of a conference.
"We expect an acceleration in the second half. Things are warming up," he added.
His remarks come before the national bank's quarterly monetary policy review on September 15 when it is expected to hold interest rates as they are in an economic environment of low inflation and low growth.
Fears over a shortage of petrol after Hurricane Katrina damage to refineries in the United States are keeping world crude prices close to $70 (SFr86.1) a barrel.
One of the repercussions is that petrol prices in Switzerland have shot up over the past week by ten centimes per litre of unleaded to a record SFr1.75.
"There has never been an increase of ten centimes in such a short space of time," commented Rolf Hartl, director of the Swiss Oil Union in Zurich.
Economist Hanspeter Hausheer at Switzerland's largest bank, UBS, described the rise as "a great shock".
And there are fears that there is worse to come, as the US looks towards Europe for oil reserves.
Trucks and taxis
Some transport companies in Switzerland are already considering putting up their charges as a result of the oil price increases. These include road haulage firms and taxis.
"The price of diesel is making life difficult for us," commented Beat Keiser, spokesman for the Swiss Road Haulage Association, adding that charges to the customer should go up by at least six per cent.
The Mobility car-sharing cooperative is to raise its prices from next month.
But Swiss post buses will not be charging more for the time being, although they guzzle 33 million litres of diesel a year.
Economist Claudio Saputelli at Credit Suisse told swissinfo that he did not think the petrol price would go much higher.
"If it goes up, it will be by a few centimes and not more. [And] the price must really go up a lot further to have a significant impact on consumer behaviour."
Saputelli explained that consumer confidence in Switzerland had been a problem over the last two or three years as a result of the poor situation on the Swiss labour market.
"It's less a question of oil prices. We don't expect the oil price to have an impact on consumer confidence but more from the labour market."
He also said the risk of a recession in Switzerland was not very high.
"It's rather low because the economy here in Switzerland is more or less stable and one good signal is that we have a good domestic demand... That demand gives a good base for [economic] growth in the next quarters," he said.
swissinfo, Robert Brookes
Average price in Switzerland per litre of unleaded petrol (2005):
International oil companies have been reporting booming business, with the "big boys" reporting double-digit profit growth.
ExxonMobil of the United States posted a first-half profit of $15.5 billion (SFr19.12 billion), 38 per cent up on the comparable period in 2004.
Royal Dutch/Shell came in with net profit of $11.9 billion, up by 39 per cent.
Net profit at BP went up by almost a third to $12.2 billion.
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