Fuel prices, why do WE pay so much?

[Claw Hama]

This was sent to me this morning, crooks and governments, one in the same.

Subject: FW: The truth about fuel this chap is 'spot on'.
Fuel: The Mass Debate Or How to Knock About 50c a Litre Off the Price Of Fuel

First and foremost this debate should be centred on Diesel NOT Unleaded.

Why? You may ask. Just look at the increase in supermarket prices for you answer. While it may cost you $5 or $10 extra to fill your tank everything that is transported (which is everything) rises as Diesel rises. My average basket at the supermarket per week has increased on average $30 and that's for one person. Australia's whole economy is tied to Diesel and therefore it should be afforded the same priority and status as water i.e. An essential commodity.

I own a small transport company and I have had to significantly raise my prices twice in the past year just to maintain profit margins. This costs you money too. I am compelled to write this letter because I am sick of all the namby-pamby pussyfooting around everyone seems to be doing about the current fuel debate. I have spent considerable time researching this area because it affects my income. Contained herein is the WHOLE truth about the debate, the WHOLE big picture, if you will. NO-ONE till now has had the testicular fortitude to stick their necks out and present the WHOLE argument about just how much we are being RIPPED OFF. If you want the truth and the WHOLE truth read on.

DON'T - Listen to spin doctors from the oil companies. THEY HAVE A VESTED INTREST TO KEEP FUEL PRICES HIGH. DON'T - Listen to the government - state or federal. THEY HAVE A VESTED INTREST TO KEEP FUEL PRICES HIGH. DON'T - pay too much attention to news or current affairs programs. THEY HAVE THEIR OWN AGENDAS.

So here we go, How to make fuel cheaper!

FIRSTLY - DISBAND FUEL PARITY

Parity, for those that don't know, is government sanctioned price fixing (simple as that). Parity allows fuel companies to sell their products for the highest current price they find in the Asia Pacific region. It completely disregards supply and demand economics and eliminates any need for competition amongst them selves.

Don't believe me? Just look at the price of Diesel. If you remember growing up when Diesel was always 10-15c p/l cheaper than Petrol you might understand this more.

How can a product that costs far less to produce (partially a by-product of producing Unleaded as well) and a product that Australia uses more of than any other fuel be MORE EXPENSIVE than Unleaded? Simple, ring Singapore, where they don't use a lot of Diesel and import all their fuel, find out how much it's selling for there and charge the same here - sound fair? NOT!

Any other industry who tried this one would be hauled of to the High Court quick smart and prosecuted for price fixing! Oh but hang on, our government ALLOWS them to do this

NUMBER TWO - BARRELL PRICE

That price the news loves to show us each night is the PREMIUM GRADE crude oil price. Australian oil companies DO NOT buy PREMIUM GRADE crude oil! In fact Australia produces around 70% of its own oil and imports about 30%. The cost of production per litre produced here is cheaper than that of imported
fuel, but in no way is this factored into the pump price, because they don't need to (SEE PARITY ABOVE) we pay a pump price based on PREMIUM GRADE crude oil price the same as if we imported all of it, say somewhere like Singapore! Starting to get the picture?

NUMBER THREE - LEVIES

Everyone knows that both State and Federal Governments take a large slice of the cost of a litre of fuel. This equates in total to about 46% of the price per litre. This money is used for infrastructure, road trauma etc. Etc. So fair enough right? WRONG! What is wrong is that it is a PERCENTAGE! Look at this. If a litre of fuel costs $1.00 then the Government gets 46c p/l, right? A week later fuel rises to $1.10 p/l; the Government gets 50.6c p/l, bingo! Something tells me that in one week, their costs, IN NO WAY have gone up 9%! As I stated previously - THE GOVERNMENT HAS A VESTED INTREST TO KEEP FUEL PRICES HIGH. THEY MAKE LOTS MORE FREE MONEY! Why else do they allow fuel companies to maintain PARITY?

If they changed the tax (sorry, levy) to a flat rate tied to the GDP then the fuel price would drop drastically and immediately!

NUMBER FOUR - GST - THE DOUBLE DIPP

Now this one is outright "THIEVERY" and also applies to cigarettes and alcohol.

GST = Goods and Services Tax, correct?

46% or 46c in every dollar in the price of a litre of fuel is TAX (sorry; again, LEVY).

What part of LEVY is a good or a service? YOU CANNOT TAX, TAX RIGHT? WRONG!

You do the math.

Say fuel costs $1.00 p/l - the GST component = 9c

But hang on a minute 46% or 46c of this is TAX!

i.e., 4.14c of the GST is ILLEGALLY CHARGED ON THE TAX COMPONENT! Not much you say?

FOR EVERY LITRE SOLD IN AUSTRALIA EVERY DAY!

That equates to millions of free dollars for the Government! I'll say it one more time - THE GOVERNMENT HAS A VESTED INTREST TO KEEP FUEL PRICES HIGH.
THEY MAKE LOTS MORE FREE MONEY

The GST on fuel should be 5.4% not 10%. At $1.75 p/l this would drop the current price by around 8c p/l.

Feeling a little annoyed? You should be!

Even without disbanding parity and introducing real competition among fuel companies, you should be paying about 40c less per litre!

My name is Graeme Strempel, [email protected] and I run a small transport business, I happily welcome anyone, Government and fuel companies included to prove me wrong.

If you feel strongly about this issue then pass this missive on to everyone in your address book. Eventually someone might take notice.

Email Australia. Be part of history. http://emailaustralia.ninemsn.com.au

[Big Shed]

Whilst I agree that we are paying too much for fuel, particularly diesel, the above (rant?) is so full of inaccuracies and misinformation that you wouldn't know where to start to list them all.

Suffice to say that the fuel excise (what a charming word for a tax) is not a percentage but a flat 38c/ltr, made a flat rate by (you guessed it!) John Howard.

The GST is indeed a percentage and is indeed a "tax on a tax".

We only have to look at Europe to see that our government has a long way to go in collecting excise on fuel.

I am glad to say I don't pay excise when I fill up at the pump, only GST. My car runs on LPG for which I pay, at present, 63.9c/ltr, which gives me about 8.5km of driving.

So whilst I find the petrol/diesel debate very interesting on a personal level, and I do realise that ultimately I pay for higher diesel prices in the shops, I am not directly affected at the pump. When I fill my 75ltr tank it costs me $48 (less $3.00 for the fuel docket) and this gives me 635km of driving. When I do a highway trip, such as going to Melbourne or Adelaide, this goes up to 750km.

Considering that Howard brought in a subsidy for installing LPG, I find it amazing that there are so few (comparatively) cars on the road using LPG. After govt subsidy it cost about $300-$400 to have LPG fitted, yet people still give me all sorts of reasons why they wouldn't use LPG. Go figure.

So, in closing I didn't just knock off 50c a litre of fuel, I knocked a dollar a litre off.

[AlexS]

1. We are using more fuel
2. We are producing less fuel
3. Prices will go up
4. Get used to it.

[Check twice!]

A very interesting rant, but alot of it is incorrect.

The short of it, is no matter how we look at it the oil companies and those who own them are the ones that artificially keep the cost up.

Point fingers where we want but we do have the ability to power vechiles with alternative means of power. It has not caught on because it is not in the best interest of the oil companies and goverments.

Europe is the most advanced in renewable alternative forms of energy. My hat goes off to them.

An interesting thought he who controls the oil, controls the world, as it stands. We have been made dependant on it and now, it holds us ransom.

Blame ourselves for being led down the garden path, by oil companies, goverments, car manufactures, name it, "it owns us".

Just my 2 cents!

John

[Claw Hama]

I was more interested in how much we produce in Australia and why we should be paying the international ransom price. I use unleaded ethanol fuel which we should also be able to produce cheaply having both our own oil and own ethanol.
It doesn't worry me a whole lot one way or the other because working for myself in a top end market I just put my prices up a little more. Someone paying 2 or more million for a house don't get upset at paying a few more dollars on there custom timber items.

[Big Shed]

I was more interested in how much we produce in Australia and why we should be paying the international ransom price. I use unleaded ethanol fuel which we should also be able to produce cheaply having both our own oil and own ethanol.
It doesn't worry me a whole lot one way or the other because working for myself in a top end market I just put my prices up a little more. Someone paying 2 or more million for a house don't get upset at paying a few more dollars on there custom timber items.

Sorry to burst your bubble, we are actually nett importers of oil and this is getting worse year by year, a large factor in our balance of trade problems.

As for paying international prices for oil (we are actually linked to to the Singapore exchange price (TAPIS), if we didn't all our oil would be exported as the oil companies could get better prices overseas.

Take wheat as an example, we are nett exporters of wheat, yet we as local consumers pay the international wheat price. If we didn't, the farmers would export all our wheat as they can get a better price overseas.

[Ellemcbeast]

Gentlemen. A few oil facts.

80% of the worlds oil production is owned by State owned oil companies, not the publicly owned companies, so vilified in the media.

Saudi Arabia exports 60% of the worlds crude oil supply. 60% of this comes from one oil field, the Al Ghawar field. This field was discovered in 1948 and has been the largest producing field ever since. 8 million barrels of sea water are pumped into the Al Ghawar every day to flood the oil upwards to the extraction wells. When this field begins to turn off it will do so quickly. It may be happening already.
5 years ago there were 4 major oil fields producing at greater than 1 million barrels a day. Today there is one

There is a shortage of major oil fields, within easy reach of the surface being found and everybody is looking.There are no new major fields being found.

What we should be worrying about is can Australia get hold of sufficient supply to satisfy its daily need for 880,000 barrels a day? Currently we import approximately 350,000 barrels a day, much of that refined product. Australialace sources the majority of its imported oil from ASEAN countries. As these countries domestic oil production diminishes, they will turn the oil export tap off and use the available supply for themselves. Indonesia has already done this and is exiting OPEC, as it becomes a net oil importer.

Where will Australia source its growing demand for imported oil when the ASEAN supply is no longer available? It is time to understand that with the new demand for oil from China and India is exposing a fundamental supply weakness, earlier than planned. The world’s oil producers cannot raise the daily production rate to meet new demand, due to the lack of new discoveries of major oil fields. Oil is being sold to the highest bidder.

With Bass Strait production declining at 12% per year, this country had better find some new supply soon, or, today's prices will be seen as the good old days.

[Terry B]

I assume that the world production of iol hasn't fallen over the last year but the price has gone up ~30%. Lost of reasons are given for this including increasing demand etc. Some of that increas is tax and the various govenments get that money. WHO IS MAKING THE BIG INCREASE IN INCOME?
I assume that lots of it is going to Saudi. What are they spending it on or is it just adding to vast wealth that is already there?

[Check twice!]

Just an interesting point, we in Canada could be self sufficient country, because of trade agreements and what not, we import oil. I really do not believe there is a oil shortage or the ability to find more, the price is controlled by world brokers, it is not in their best interest to raise production. Saudi Arabia can turn the taps on if they desire, they have done it in the past.

I just feel we are being manipulated, and it does not taste good.

Just my view!
John

[Gingermick]

America invades Iraq and the price of oil goes up 400+% (over 5 years)
Israel says it's gonna attack Iran and price goes up again.

[Wongo]

Never mind about the oil prices. What about the gold prices. They are just so expensive. Oh well I will have to stop buying gold now.



You can either pay up, drive less or go pumping oil from the sea yourself.

[Check twice!]

Never mind about the oil prices. What about the gold prices. They are just so expensive. Oh well I will have to stop buying gold now.



You can either pay up, drive less or go pumping oil from the sea yourself.

Man, sell the gold fast, buy oil, at the rate it is going up it will soon be worth more than gold.

Have a great day
John