FUNDAMENTAL ECONOMIC INTERRELATIONS UNDERLYING THE DEVELOPMENT OF THE WORLD MARKET PRICES OF PRIMARY ENERGY

The study explains the internal relations between the crude oil prices and the costs of coal extraction. Under the effect of technical progress the world market for primary energy is becoming increasingly homogeneous. This is a consequence of the fact that various kinds of primary energy may be subs...

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Bibliographic Details
Published in:Acta oeconomica 1979-01, Vol.22 (3/4), p.349-363
Main Authors: CSÁGOLY, F., MURAKÖZI, E.
Format: Article
Language:English
Subjects:
Capital costs
Coal
Coal industry
Crude oil
Energy
Fuel oils
Gasoline
Lignite
Market prices
Oil prices
Petroleum industry
Prices
Production costs
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Summary:The study explains the internal relations between the crude oil prices and the costs of coal extraction. Under the effect of technical progress the world market for primary energy is becoming increasingly homogeneous. This is a consequence of the fact that various kinds of primary energy may be substituted for each other. The authors also search for an economically justified price for energy. Centre of the energy world market price is determined by the producer whose inputs are highest but whose products are still needed in substantial quantities. They find this marginal producer in the Ruhr area and state that it is the extraction costs of coal mined there that is also the highest price attainable for imported oil - considering, of course, the differences in utility value - in terms of per calory price. The explosion-like rise in the price of oil has had two main causes: 1. the market price of oil lagged much behind the price centre computed for the aggregate of kinds of primary energy; 2. the price centre (the cost of coal extraction) increased considerably too.
ISSN:0001-6373
1588-2659