petrol price

[mic-d]

The price of oil is down again, to US$35 a barrel and yet the price of fuel has gone up again to over $1.20/l :(( Do you think the greedy lowlife scum sucking scabs in the oil companies are gouging while the eyes of the nation are distracted elsewhere? Or is there some logical reason for the price of fuel?

Cheers
Michael

[wolften]

...of course there is logical reason for the price of fuel at the pump to skyrocket.
The oil companies do not give a flying f*%# about the public. What more do you need to know.
Nobody knows how much it costs the oil companies to bring the fuel to the pump, nor will they divulge that nfo.
Ruddy and his predecessors, won't do anything concrete about fuel prices, because too much money is too be made from the higher prices.

[Ron Dunn]

Hey, be generous ... they're just trying to raise their annual bonuses to Wall Street levels.

[mjmjm]

Seem to remember that last year a minister in this government suggested that they would allow independent imports of petrol into the country. As a way of driving down prices. I believe it's called competition.

The proposal suffered an immediate death.

Michael

[weisyboy]

its terrible why is deisel more then fuel nevre used to be. i dont give a fig what the price it in asia we are in australia.

if any other company did what the oil companys do tehy would be put out of business so fast.

what happend to all these enquireys that ruddy set up?

[damian]

The reason there is no competition is that all the portside fuel dumps are owned by the majors, there is a lack of capacity, and no one has the $ to build more. Waterfront land and all that.

The reason we have world parity pricing is if the oil companies can sell their product in Singapore or USA or wherever for $40 a barrel but here it's restricted to $35 obviously they are going to sell it all overseas. We do produce a certain amount of light crude domestically, and it is suitable for petrol making, but it's not the cheapest oil to drill nor is it enough to supply all our needs.

We are a net energy exporter but that's because of coal.

Australia has huge oil reserves, in fact the whole thing about oil running out is a nonsense. What will happen though is it will get more expensive to drill. Ours is feasible at a certain price point, like the Canadian oil sands, but at $35 it probably isn't.

I don't like it either but there are other things with higher priority on my getting angry list, like the state of the triple 0 service here in qld and our marvelous labour government who have been running the state into the sewer for the last 10 years (not that I'm particularly liberal, I just hate their brazen corruption). Oil companies may be evil but polly's leave them for dead...

[mic-d]

When it comes to economics I don't really wish to understand the meanderings of what I believe is a totally contrived world (probably much to my detriment, I understand:roll:). Nor do I really understand the complexities of politics and their complex relationship with business and economics or really want to. I did not post with the intent of politicising this, but I guess that is my naivety. But the post so far have already raised two interesting questions for me. Please speak to me in little words that make sense:B Why has the government backed off from getting tough with the oil companies. One might conclude that it is corruption. Do the companies payoff the pollies, is it some form of blackmail by the companies?

There are several companies in Australia, surely that is competition, and if there is not competition, does that by implication mean there is collusion? And if we can come to such a conclusion so quickly, why can the pollies not.
I doubt I will get an answer I will understand, I much prefer to live in the natural world as much as possible:)

Cheers
Michael
And you might understand from the way I post, I could not be a politician :)

[Gra]

There are several companies in Australia, surely that is competition, and if there is not competition, does that by implication mean there is collusion? And if we can come to such a conclusion so quickly, why can the pollies not.

Suspecting a crime and proving it are two different things. This is my guys like Moran and the other underworld figures still wonder the streets (Well those that haven't been shot)

[Dion N]

The price of oil is down again, to US$35 a barrel and yet the price of fuel has gone up again to over $1.20/l :(( Do you think the greedy lowlife scum sucking scabs in the oil companies are gouging while the eyes of the nation are distracted elsewhere? Or is there some logical reason for the price of fuel?

Cheers
Michael

The Aussie / US dollar exchange rate plays a major part in petrol pricing in Oz...

[Waldo]

:(( Do you think the greedy lowlife scum sucking scabs in the oil companies are gouging while the eyes of the nation are distracted elsewhere? Or is there some logical reason for the price of fuel?

Cheers
Michael

:ranton:

Exacery. And as we all go deeper into the red, the petrol cartels are aiding and abetting the slide further into the red with prices of petrol/diesel/gas above where it should really be - and we're the poor mob who have no choice but they make us poorer by it. It makes you wonder $ above humanity at any price.

:rantoff:

[mic-d]

The Aussie / US dollar exchange rate plays a major part in petrol pricing in Oz...

But when fuel was recently down below the dollar mark, the price of oil was higher, was the exchange rate much better than it is now?

Cheers
Michael

[The Bleeder]

Carl,

Diesel near me is at $1.18 a litre and so is unleaded. For a time diesel was nearly 30c a litre more than unleaded. So who was making a huge profit.........

[damian]

I did not post with the intent of politicising this, but I guess that is my naivety. But the post so far have already raised two interesting questions for me. Please speak to me in little words that make sense:B Why has the government backed off from getting tough with the oil companies. One might conclude that it is corruption. Do the companies payoff the pollies, is it some form of blackmail by the companies?

There are several companies in Australia, surely that is competition, and if there is not competition, does that by implication mean there is collusion? And if we can come to such a conclusion so quickly, why can the pollies not.
I doubt I will get an answer I will understand, I much prefer to live in the natural world as much as possible:)

Cheers
Michael
And you might understand from the way I post, I could not be a politician :)

1. It was a political and economic question so the ranting was inevitable.

2. The government has backed off from pursuing the oil companies simply because it can't prove any wrongdoing and realistically they can't do anything to stop the current situation short of a nationalised oil industry. They have tried regulating prices before, the result is oil shortages. You could try a schoolyard analogy. The teacher has certain powers over the students, but if the only football in teh school yard is owned by one of the boys if he doesn't like the rules he takes his ball and goes home. Or puts it in his schoolbag and doesn't let anyone play.

Also remember politicians only act to win public approval. If it's not a headline, or if they can't see a way to get milage out of it, it's off the agenda. This is a headline but it's hard to make yourself look like a hero if your toothless.

3. I have no doubt our politicians are corrupt. When the Hawke labour government came to power in 83 there was a revolving door of flights to Switzerland by all the big movers to sort out thier accounts. Hawke and Keeting both went as did Richardson et al. Whether actual corruption is driving this is another matter. It's more likely to be the reality.

4. There have been accusations of collusion in the Australian oil industry for decades. No one has gathered sufficient proof to mount a case let alone win.

Finally, capitalism can be very ugly, but in thruth most of us benifit from it far more than we suffer. It's really easy to lament our problems but there is always someone worse off. :D

[mic-d]

1. It was a political and economic question so the ranting was inevitable.

2. The government has backed off from pursuing the oil companies simply because it can't prove any wrongdoing and realistically they can't do anything to stop the current situation short of a nationalised oil industry. They have tried regulating prices before, the result is oil shortages. You could try a schoolyard analogy. The teacher has certain powers over the students, but if the only football in teh school yard is owned by one of the boys if he doesn't like the rules he takes his ball and goes home. Or puts it in his schoolbag and doesn't let anyone play.

Also remember politicians only act to win public approval. If it's not a headline, or if they can't see a way to get milage out of it, it's off the agenda. This is a headline but it's hard to make yourself look like a hero if your toothless.

3. I have no doubt our politicians are corrupt. When the Hawke labour government came to power in 83 there was a revolving door of flights to Switzerland by all the big movers to sort out thier accounts. Hawke and Keeting both went as did Richardson et al. Whether actual corruption is driving this is another matter. It's more likely to be the reality.

4. There have been accusations of collusion in the Australian oil industry for decades. No one has gathered sufficient proof to mount a case let alone win.

Finally, capitalism can be very ugly, but in thruth most of us benifit from it far more than we suffer. It's really easy to lament our problems but there is always someone worse off. :D

The football you are talking about is oil? You are saying they would rather cut their nose off despite their face and lose business, due to an oil shortage? That doesn't make sense given that it is still a loss of profits, whether by restricting sales or reducing price.
It may be a political question Damien, but it doesn't help to use this thread to get on your soapbox and bash the labour-side of politics, do that in your own thread.
Cheers
Michael

[damian]

The football you are talking about is oil? You are saying they would rather cut their nose off despite their face and lose business, due to an oil shortage? That doesn't make sense given that it is still a loss of profits, whether by restricting sales or reducing price.
It may be a political question Damien, but it doesn't help to use this thread to get on your soapbox and bash the labour-side of politics, do that in your own thread.
Cheers
Michael

Australia is not the only market they can sell into. As I said in my previous post not all the oil consumed in Australia is drilled in Australia. In fact a lot of our petrol is refined overseas. Why ship it here and get $35/brl if you can ship it to the US and get $40 ?

I was trying to put the petrol situation into perspective, but since you find my comments offensive someone else can answer your questions.

[Sparhawk]

I recently noticed that if your Coles brand petrol station has a green sign, then that price is for E10 fuel (written in small print). I've got no problems using E10, but not all the bowsers at the servo has E10 (4 out of 12 at my local), so you can easily fill up with normal unleaded, thinking you are getting the E10 price.
- sorry to be a little OT

[toolbagsPLUS]

Seem to remember that last year a minister in this government suggested that they would allow independent imports of petrol into the country. As a way of driving down prices. I believe it's called competition.

The proposal suffered an immediate death.

Michael

Was'nt that (competition) the rational behind open market electricity, am i the only one or have others noticed a dramatic increase in power bills since the introduction of that so called competition??:~ Does the word cartel seem relevant:no::no:

Cheers

Steve

[Vernonv]

The football you are talking about is oil? You are saying they would rather cut their nose off despite their face and lose business,
Instead of putting the football in his bag, the kid takes the football to a new school with more lenient rules.
So as Damien has mentioned, if the Gubmint forces petrol prices down (beyond a certain point), the oil will simply be sold where the oil companies can get the best price for it (ie. not Australia).



I was trying to put the petrol situation into perspective, but since you find my comments offensive someone else can answer your questions.
That reminds me of another school yard analogy involving a kid with a bat and ball :D ... just teasing ... :D

[Big Shed]

Of course one thing that keeps the price of our fuel artificially high, and stops governments from doing nothing more than talking, is the fact that roughly half the cost of our fuel is excise and GST.(and yes Virginia, the GST is a tax on a tax:oo:)

It is a bit difficult to go to an oil company and tell them that they are price gouging when you take the biggest cut!:doh:

As Mr Rudd has found out, it is much easier to talk tough in Opposition than it is to do something about it in Government. (whatever happened to Fuel Watch????)

[mic-d]

I was trying to put the petrol situation into perspective, but since you find my comments offensive someone else can answer your questions.

Yeah, what-evaa. I was after a more balanced answer anyway.

Cheers
Michael

[mic-d]

I checked the last time the Singapore Conventional Premium Gasoline Spot Price (if that is with what we correlate) was about the same price as it is ATM, seems to be March 2005.
http://tonto.eia.doe.gov/dnav/pet/hist/rp15sin5d.htm

At this time the ULP price in Brisbane was about $0.95 - $1.00/lt

The exchange rate was about USD0.79/1AUD
http://www.x-rates.com/cgi-bin/hlookup.cgi

Today it is around the USD0.65/1AUD

Dollar is about 20% weaker, fuel is about 20% higher, so perhaps on this historical correlation fuel is about where it should be.
CAVEATS I don't know if this simplistic correlation is roughly correct and I don't know if the bottomline price is a fair thing.

Cheers
Michael

[mjmjm]

Hi Michael,
I deleted it. Decided it was off the point and political.

Michael

PS Book arrived. Thanks.

[mic-d]

Hi Michael,
I deleted it. Decided it was off the point and political.

Michael

PS Book arrived. Thanks.

:;
hope there is a project or two for you in the book.

Cheers
Michael

[Dion N]

Oil / petrol prices are driven by a number of factors. I don't claim to know all of the ins and outs but here are a few things to consider.

1. OPEC members (Organisation of Petroleum Exporting Countries) meet and discusses the production levels in order to match demand and supply in order to achieve the best possible price. This pretty much amounts to a global cartel.

2. Oil is a tradeable commodity ie there are banks, investment firms, equity funds etc that buy oil "futures contracts." They never actually buy the oil, just the right to buy it at a future date and then trade the rights, which eventually end up in the hands of a company that actually buys the oil. Hence speculative investors who never handle the oil artifically alter the oil price. (a bit like residential property investors inflating house prices for owner occupiers). The recent fall in oil prices was driven, in part by a reduced demand for oil futures contracts.

3. Variations in the exchange rate affect the cost of petrol and diesel

4. The is a greater demand for petrol than diesel (at your average service station) and hence greater economies of scale for petrol vs diesel thus a price difference.

5. There are going to be cost differences between petrol and diesel due to the amount of refined product available per barrel of oil and the costs to refine the two.

6. The oil companies monitor each other's prices in Australia very closely (almost in real time) and match theirs to suit.

[weisyboy]

5. There are going to be cost differences between petrol and diesel due to the amount of refined product available per barrel of oil and the costs to refine the two.

diesel is less refined why is it so mutch dearer?

i used to be half the price.

[blonk]

These days, diesel goes through a pretty thorough refining process in order to meet minimum sulphur requirements. I beleive the biggest hit from diesel is the beloved government charrging a significantly larger tariff than on regular fuel

[Dion N]

As previously stated - the price here is based on the Singapore price. Hence our price reflects the level of supply and demand in Asia. If you have been listening to the news recently you may have noticed that the TAPAS Crude price (Singapore) was around $50+ / barrel whereas the NOMEX Crude price (America) was around $37 / barrel which perhaps is due to a drop in US demand driven by their recession. The growing numbers of middle class Asians seems to indicate a continuing demand for cars and oil in Asia... which translates to higher prices for us :(

[Big Shed]

..........and more to come! (http://www.abc.net.au/news/stories/2009/02/18/2494299.htm)

[Waldo]

..........and more to come! (http://www.abc.net.au/news/stories/2009/02/18/2494299.htm)

Which if I'm not mistaken, was another one of Keating's had-to-have scenarios. :((

Pollies forget that they're in for a short time and often do things that affect long past their terms of office.

A day will come and we'll be cutting the floors out of our cars and doing a Fred Flintstone.

[Big Shed]

A day will come and we'll be cutting the floors out of our cars and doing a Fred Flintstone.




Or do as I have done for the past 25+ years, and run your car on LPG. Especially now with Howards LPG bonus the average cost of conversion is less than $500, recouped in less than 6 months of driving. People spend more on mag wheels or fancy tyres without even thinking about it.

As an example, I run a VZ Commodore with factory (vapour injection) LPG. In roughly 21000km of driving my savings are $1800. As I bought the car 1 year old with the gas already on it, at no extra cost to a petrol model, that is tax free money in the bank:2tsup:

[Waldo]

Yep, :aro-u: something to think about. But there's always a long list ahead of it.

[Vernonv]

Which if I'm not mistaken, was another one of Keating's had-to-have scenarios. :((
Are you referring to our price being linked to the Singapore price? I think that was done a long time before Keating (but I could be wrong).

However let me ask this - if you had oil to sell and person A was offering you US$50 a barrel (in Singapore) and person B was offering you US$40 a barrel (in Australia), who would you sell it to?

Unless you force Australian oil producers to sell below local market (SE Asia) price, we NEED to link our price to the local market. If the government did bring in such a policy, I think you will find that local producers would shut down (or at least scale down drastically) and we would have an oil shortage, because no non-Australian oil producers would sell their oil to us, because they can get a better price on the open market.

Seems pretty simple to me.

[Waldo]

Yep, I was referring to the TAPAS.

This brings out the need to report correctly in the media. The only sources who I know of, that report on the TAPAS are Lateline Business on Ch 2 and the Business Report on SBS, the others all refer to the US crude barrel price, which as has been correctly pointed out doesn't reflect on our price, not directly anyway.

But, as always Australia for whatever reason follow the rest of the world for things, yes, prices have to reflect off something, but that it has to follow off prices for which the demand is not reflected on our local demand surely points to inadequacies and changes must be made?

[Vernonv]

... but that it has to follow off prices for which the demand is not reflected on our local demand surely points to inadequacies and changes must be made?

But the Singapore price is, for all intents and purposes, a reflection of the local demand and/or market for oil. Like it or not, we are part of the SE Asian region.

[mic-d]

At least the tele could show the tapas in the finance reports, rather than the US price, what the hell do they show that for here?
It's like mum used to say "it's got nothing to do with the price of eggs in China" erm, or something like that...

Cheers
Michael

[Waldo]

TAPAS is the Singapore crude price, they have more volume of cars per capita on roads not meant for that volume. Their demand isn't our demand. Yes, we are part of something, but it's not a reflection of our market demand or use.

It's like saying Sydney house prices are x and Melbourne and Brisbane should also pay the same median price. Markets are local and demand/supply is local within it's own borders.

We pump our own crude here, we send it offshore for refining :? (in part but not all) so why are we paying a price in a market across the water, when that market is here not there? :?

[Vernonv]

TAPAS is the Singapore crude price, they have more volume of cars per capita on roads not meant for that volume. I doubt that. Australia would have one of the highest per capita rate of car ownership in the world. On top of that we also tend to travel greater distances.

Their demand isn't our demand. Yes, we are part of something, but it's not a reflection of our market demand or use.

It's like saying Sydney house prices are x and Melbourne and Brisbane should also pay the same median price. Markets are local and demand/supply is local within it's own borders.

We pump our own crude here, we send it offshore for refining :? (in part but not all) so why are we paying a price in a market across the water, when that market is here not there? :?You can't compare houses with a commodity such as oil. Could you easily send you Melbourne house to Sydney, if the Sydney market was paying higher prices?

We have to get our oil from somewhere and the closest market is Singapore. How do we avoid paying the price that that market is asking?:?

We can't produce enough oil for our use and as mentioned before, even if we did, the producers will sell it to the highest bidder (i.e. someone else).

[Waldo]

I doubt that.

I'll try and find a reference for you, but it is true.

You're right, they're "...12 cars per 100 people. This compares with the per capita rate of 46 cars per 100 people in Australia." Maybe that side of the argument doesn't hold up, but they have more cars to amount of road space, surely that has a greater affect on consumption.

By I fail to see why when everyone recognises that things aren't right in Australia, that they're defended and govt' is gutless to take them on because it's "too hard" Australia took on Apple with their pricing, I used to pay near triple for my customised Macs, which were made, customised and shipped from Singapore, $AU to $US, now I pay $AU to $US.

It's all getting no where and useless anyway. I'm going to save my sanity and close the door behind me.



You can't compare houses with a commodity such as oil.

You can't? :? It's about market demand and supply, that's my point.

[Big Shed]

At least the tele could show the tapas in the finance reports, rather than the US price, what the hell do they show that for here?
It's like mum used to say "it's got nothing to do with the price of eggs in China" erm, or something like that...

Cheers
Michael

Yes Michael, that has been a source of puzzlement (and annoyance) for quite some time. The ABC (Alan Kohler) sometimes shows both, but usually only the NYMEX.

My brokers' website, Commsec, also only shows NYMEX, not TAPIS, go figure.

[BobL]

TAPAS is the Singapore crude price, they have more volume of cars per capita on roads not meant for that volume. Their demand isn't our demand. Yes, we are part of something, but it's not a reflection of our market demand or use.
Demand doesn't give a hoot about the "per capita" it's primarily determined by the sheer numbers of vehicles. Japan has ~13% fewer vehicles per capita, but the 4 fold bigger population means they have way more cars than us. They have smaller cars and do travel shorter distances but their overall consumption is about double the petrol we use.


We pump our own crude here, we send it offshore for refining :? (in part but not all) so why are we paying a price in a market across the water, when that market is here not there? :?

What Vernon said. Anything based on oil is highly mobile.