Petrol Price Explosion
Today (Sunday) in Melbourne we have probably a new high in petrol of $1.759 a litre. As usual Shell leads the charge.
Bad enough, but yesterday prices were around $1.36.
How can petrol jump a whopping 40 cents overnight and without warning to such a level?
No-one knows. No amount of inquiries in the last 45 years have ever got to the bottom of the issue.
Crude oil price maybe? Crude is $US 58 a barrel, and nowhere near the record high $US147 back in 2008.
And we we not paying $1.759 then.
Low $AU? It didn't collapse overnight, and, again, at 68 US cents now compared to 85 in 2008 doesn't explain it.
Those greedy multinational oil companies? That's always a simplistic cliche answer which also doesn't explain it. In any case, crude oil prices are determined by speculators on the futures market.
Supply and demand? Definitely absolutely not.
Just as our electricity industry is screwed up, so too the petroleum industry which means we export our crude and import almost all the petrol we use as a refined product from Asian countries.
What a mess.
There isn't a single simple answer. Numerous factors are at play at any given time. The big changes over short periods of time usually come down to strategic decisions by both the small operators and the big guys.
A reasonable summary of the numerous basic factors at play are explained here:
And the historical point at which one bases their comparison also affects the size of the swing
In terms of overall average prices, petrol in Australia is a lot cheaper than in Western Europe and the UK (these are between 45 and 60% higher than Aus prices), but more expensive than in the US.
BTW, crude oil prices on the futures market are not 'determined' by speculators, though they do play a role in the short run. Futures are (directly or indirectly) also used by many organisations to hedge their exposure to price risk.
Disagree with you on the speculators. Contracts are bought and sold on the futures market by speculators and traders along with any interested party or people with no interest out to make a buck.
Even the OPEC cartel can't control prices despite its pretence of turning the tap on and off.
There's no real interest by the Government in keeping fuel or energy prices low for the consumer. Ever since GST was introduced they've become addicted to reaping as much from it as possible. Increases in fuel prices just has them rubbing their greedy, slimy hands in anticipation.
Remember the days of constantly reported inflation figures that put a spotlight on unjustified price increases on a number of essentials like fuel and energy? Rarely hear the figures these days in comparison.
Another area that suffers from lack of Government action is the banking sector. In the past the government controlled State and Commonwealth Banks set the bar by default as the public always had somewhere to go for better rates and lower fees. These days the Government's toothless tiger roar achieves nothing. Banks make billions in profit and pensioners get 1.5% on their term deposits, not even keeping up with inflation.
my first car i think it was around 60c pl when i was a kid i remember seeing it at 18cpl an my stepdad doing an illegal u turn to be extravagant an layout a whole ten dollars worth!