Petrol Prices Exposed

[SpoolMan]

David Cumming (01 Nov 2005)


The recent hurricanes in America pushed the price of oil up over US$70 per barrel, and Australia’s motorists received a shock when the price of petrol hit a record 139.9cpl in the capital cities and even higher in country and remote areas.

There was great anger as the new peak coincided with a reduction in the price of crude oil. But what motorists did not realise at the time was that Hurricane Katrina had closed 100% of the Gulf of Mexico’s oil production and flooded several refineries.

Market forces kicked in, with the opportunists in the oil industry sensing that America would need refined product shipped in. They increased the barrel price of refined product by US$20 virtually overnight in Singapore. At the same time the shipping owners also increased their rates.

Because we price our fuels according to the import parity price for refined product in Singapore, Australia could not be shielded from this new price.

In August this year the wholesale price for petrol was $1.10cpl but by early September this had peaked at over$1.28cpl. Thankfully today the oil price has eased and the wholesale price has dropped below $1.20 per litre.

But is this the calm before the next storm? Will the supply shortages in the US market and the approaching American winter mean that we may hit yet another high in crude oil prices?

Motorists like the mobility and freedom that their cars give them and many are giving up other things in life in order to continue to use their cars. Sure there has been some adjustment to public transport but it appears that public transport cannot cope with a huge increase in patronage.

As for our politicians the Federal and State Government’s have handballed the problem between each other with neither prepared to assist in relief for motorists.

Even with a massive surplus the Federal Government cannot provide relief by reducing excise. Likewise they refuse to do anything about the unfair tax on a tax, whereby we have a GST on the excise.

A small change in the formula to remove excise from the GST equation would see the price of petrol drop 3.4cpl overnight.

Most fuels in this country have a tax subsidy attached to them, but the only fuel that does not have a subsidy and the only class of driver that gets whacked the full amount of tax every time they fill up is the motorist. Time for all political parties to come clean on their future fuel taxation policies.

COURTESY RACV.

[Bossxr8]

I read an article in the paper a few days ago that petrol in Australia is about 13 to 15 cents overpriced than what it should be. All the costs were worked out and for some reason it is much higher than it costs to make, transport and sell. Oil companies jacking up the price for extra profit.