Oil Prices have continued to fall in recent weeks, yet the price of petrol has hardly moved from near $1.54 a litre in New South Wales, Australia. The Australian dollar has also tumbled, but even allowing for this the price of petrol should be considerably lower than it is.
Newspaper reports say that we may need to wait another 3 weeks before we see any worthwhile drop in petrol prices in Australia – yet how soon do we see the price of fuel rise when the oil price goes up. I think this would be what we term petrol price gouging.
Australians should be paying closer to $1.20 to $1.30 a litre rather than that which we are paying currently.
The price of oil shot up today by US $25.14 a barrel at one point before closing on US $121.00 a barrel – a rise of about US $16.00 a barrel for the day. This massive rise came about because of fears that the US economy was moving into a recession and the resulting weakness of the US dollar.
The Australian dollar has risen against the US dollar, closing the day at close to 0.84 US dollars as investors abandoned the US dollar. The Australian dollar was close to parity with the US dollar several weeks ago and then fell to around 0.78 US dollars about a week ago before beginning to rise again.
For Australian motorists the price per litre of unleaded petrol has fluctuated between $1.52 and $1.62 over the last couple of weeks, with little advantage gained by the low oil price in the previous few weeks. With the rise in oil today it is unlikely that Australian motorists will see any advantage in the lower price of oil over the past couple of weeks.
It is widely speculated that Australians have been getting a raw deal at the petrol pumps over the last couple of months.
With petrol prices in Australia not reflecting the falling oil price, Australians would be justified in questioning the service you actually get at service stations. Are service stations becoming like banks – being so preoccupied with profits that fairness is no longer an option?
How can petrol sell at $1.62 a litre today when oil has now dropped to around $95.00 a barrel US? This is the highest price for petrol that I can remember – even higher than when oil was up towards $150.00 a barrel US! Doesn’t make a lot of sense does it?
In this video which is an advertisement for Total Service Stations it seems that customer service is very important to Total. Has this been your experience in customer service when fuelling your vehicle at a service station?
The price of crude oil continues to fall, yet despite the continued falls the price of petrol in Australia remains high. On Friday the price of petrol was still $1.65 per litre. The price of oil per barrel has now fallen to $123.26 US.
It’s incredible how the oil companies are so quick to pass on the rise of oil in their petrol pricing, yet when the price of crude falls they seem to be so slow in passing on the price reduction. Maybe it’s just me or is this not a display of greed and a consequence of a lack of competition?
The price of crude is falling due to a number of factors I believe, including the slowing of the global economy, which is due to a large degree to the overwhelming price of petrol at the bowser (as well as the global credit crisis). There is also a rise in supply of fuel, largely due to the fall in demand I expect rather than any increased output by OPEC countries.
The increase in demand for oil, which led to the record price of $147.27 US a barrel on the 11th July 2008, has been led by the booming economies of China and India. These two countries alone now have a population well over 2 billion people and the oil required to fuel these two economies must be enormous. It is unlikely that the 200 000 barrels a day increase in output by OPEC to about 32.9 million barrels a day is unlikely to hold the price of oil to the current lower price for long. The price of crude can only go up as these two economies begin to pick up once again.
The price of unleaded petrol in Australia reached 173.9 cents a litre this past week, with expectations that it may well reach $2.00 a litre by the end of the year. A report from the CSIRO stated that petrol prices may well reach $8.00 a litre by 2018.
With the way that fuel prices are continuing to rise, petrol is rapidly becoming a luxury item that low income earners will soon be unable to afford, if they can still afford it now.
There are various ways that Australians are trying to cope with the rise of fuel prices – use less petrol, ensure you do everything you need to do with the one car journey, use petrol reduction dockets when possible, no longer purchase some items or take part in certain entertainment, etc.
What does the future hold for ordinary Australians? Surely there will be a major shift in the way we live our lives should there be no alternative to petrol in the near future. There may well be major economic consequences with various industries collapsing (such as tourism) and staff being unable to get to their jobs, etc. Perhaps there will be employer funded transport (such as company bus runs, etc). It is likely that public transport will soon be under major stress and the need for increased public transport infrastructure will soon become apparent.
One thing is sure – something will soon have to give. Things cannot continue the way they currently are.