Stupid fuel price question

And it's only going to get worse thanks to Johnny's latest legislation... Oh hang, he can't do anything about the price of fuel... It's not his fault.

Actually any vegetable oil can be used. The word Canola in fact is a play around with the words Canadian Oil Association....While ever Biodiesel manufacture & sale is in the hands of the Oil Companies do you honestly expect they would ever undercut themselves????? But it wasn't a stupid question Dave, just a question a lot of people want answered but can only get political rhetoric in response....

David has now added a "Spelling" button to make it easier for people to write posts that can be easily understood.

formy - for my

rehtoric - rhetoric

Vegitable - vegetable

asside - aside

efficiant - efficient

outragious - outrageous

petrolium - petroleum

quantaties - quantities

rethinkk - rethink

practive - practice

unfortunatally - unfortunately

Any student of economics will know that the price of a product has nothing to with what it costs to produce - it is what customers are prepared to pay - so if we are prepared to pay (but might not like it) about $1.45 for diesel and would be really happy to pay say 20c less for an alternative why would a supplier sell Bio for say 70c a litre when he knows he can sell the same amounts for say $1.20 - why throw away an additional 50c profit.

Sorry; the price is what we are prepared to pay not what it costs to produce.

An example - do you think it costs more to build a Porshe 911 than a Dunny Door - not likely - however a buyer would never pay $150,000 for a new Commodore but happliy will do he same for the Porshe. Same for you Toyo lovers - Does it really cost much more to build a Lexus 470 (Cruiser) vs a Cruiser GXL a couple of grand difference that is all but some people are prepared to pay $100,000 for the Lexus when the GXL can be got for about $65,ooo at the moment.

If these two cruisers sold on the basis of what they cost to build they would be selling for about $30,000 but we are prepared to pay what we do for the Lexus and the GXL.

Garry

Well - It's clear - the price of something is what the market will bear, or what someone is prepared to sell it to you for - not what it costs you to make it.

Biodiesel may be made from Canola, but is can also be made from all sorts of fats.

This includes pork fat and all sorts of animal fats as well as pretty much any vegetable fats.

The price of biodiesel in Australia is probably influenced by:

1. the small volumes produced
2. the even smaller volumes consumed - including because of higher distribution costs
3. cannibalisation of profits when required to replace mainstream fuel in tanks and through bowsers
4. the high demand for oil stocks - even waste oils, that could be used to produce it
5. the price of diesel
6. the price of diesel
7. the price of diesel

John Howard's tax really doesn't directly affect the price at the bowser unless you qualified for the Diesel Rebate anyway ... and most 4WD don't.

Ciao for now
Andrew.

Good on ya Exploder. I like that attitude.

I understand all of this calm economic stuff. But the control and self interest that the multinationals have over government policy making makes me feel sick. No more simply trusting your government. Every policy and decision has to be analysed to work out who put pressure on them and who benefits!

It takes universties (what this government has done to them is another matter) and scientists to make progress in long term viable fuels. Can't wait for a solar powered fourby.

Had a Canadian mate who worked in the oil drilling business for all his life from 16 to day he retired started as a rouse about and worked his way to the top eventually looking after all the rigs in the North Sea. Eventually going to the Middle East and other places. his point when asked was remember when they blew up wells in Kuwait and they put the price of petrol up because we where going to have a world shortage was laughable he said it was like taking a cup full of water out of an Olympic size swimming pool. He said 1 well had enough oil to last (payload he called it) the world for 2 hundred years at world current consumption that was one well. The yanks have a 3 year stock pile always on hand. It funny how the price always goes up but never goes down at the same rate. No cartels in business except the oil buisness, goverments and multinationals make too much money for doing stuff all. God help us when the Chinese decide to absorb oil as much as they are sucking up minerals Dags

it costs near enough the same as ordinary diesel

I thought a 3yr old would know that - supply and demand.. people NEED fuel, and they are happy to save 4 cents by getting ripped off blind buying their food instead.

if they saw bio at 10cents cheaper, they would be running in to by it by the trailer load.

These pricing debates are always interesting. Oil companies always get a serve, so does the government. But I rarely read about Toyota getting a serve. It makes a huge profit, sells its Landcruiser for a massive profit, but that's OK? If a Landcruiser was 10,000 cheaper, that could be 5 years worth of fuel...

I used Toyota, but other brands could be substituted...though Toyota does do pretty well on the profit front!

Sorry, it doesn't answer your question though.

Let's pretend our gracious leader removed the fuel excise overnight.
The price of fuel 'may' then drop by 38 c/l which is the excise. It may drop a little more as there would be less GST due too.

Since what, less than a year, we have seen the price rise from $1 litre to $1.40 litre, so we could all settle down and get fuel under that magical $1 litre barrier.

But how long do you think it will take for the world oil price to rise by whatever it has done over the last 6 months and suddenly we are all paying $1.40l again??

It's a controversial opinion, but I'm on the side of the peak oil proponents.

I took time to attend a forum yesterday morning, put on by BP where the president of the Sustainable Transport Coalition of WA " target="EOF" class="lbg">www.stcwa.org.au/ made many points in favour of Peak oil - in fact he called it Twin Peaks for reasons he explained well and I don't feel like going into here. However the CEO of the Kwinana refinery reckoned he could put ten knowledgeable people in a room and get ten different views on peak oil.

For those who say we have hundreds of years of supply left. Maybe we do - but who is checking on the claims of the Saudi's that they are floating on the stuff? No one. We just believe them.
How come they are pulling drilling rigs from all over the world to the middle east? Are they trying to increase capacity and stick more holes in the known reserves, or are they struggling to supply more than they are now and seeking new reserves? Who knows, there isn't any independent auditing.

Yes we do find more oil - one of the big recent finds had the capacity to supply world demand for ..... two weeks. Yippeee.

Bush, Howard and most of us get sucked in to the traditional economics argument - that price will control demand, and the market will sort things out. Economics also admit that if the price of eggs go high enough, roosters will start laying.

The market will not fix this folks.

One of the things we are all missing whilst we bicker about whether fuel is wonderful at $1 litre or disastrous at $1.40 litre is that we must look at ways of reducing, lets say that again REDUCING, our energy demands. Renewables cannot supplant fossil fuels at the current demand, not come close. I love the stuff, but without reduction in demand it ain't gunna cut it.

Back to the thread - why is rapeseed, AKA Canola an expensive feedstock for BioD? Have you seen the stuff? Tiny little seeds. Lots of hectares of farming, lots of harvesting, lots of crushing, filtering, degumming and that's before you can put it into a BioD plant. You can buy good de gummed Canola for $1 litre on farm for 200 litre drums. Cheaper if I buy a 67,000 litre tanker full, but not too much cheaper. Or you can, if you're lucky pop down to a supermarket and buy dumped Belgium canola for $1 litre. Add on the 38c/l excise plus a bit for methanol, NaOH, and the investment in plant, and it's no wonder it's the same price as fossil fuel.

Flame away, but until the price of fuel rises more, perhaps double what it is now, we are not going to see the substantial changes in behaviours necessary to control demand enough to make a difference, AND make alternatives more financially viable.

Tim

Just read an article in our RAC magazine today - with most makes of cars, use of bio diesel could void the manufacturer's warranty. Peugeot was the best - "acceptable for some models up to 30%". Some brands allowed 5%.

Where in the world did we get the idea that the reason for making a replacememnt fuel was that it was going to be significantly cheaper? Why would the producers of the replacement vastly undercut their only competition and forego guaranteed large profits? Does anyone seriously think that the producers of biodiesel are well meaning philanthropists?

It's a business guys. A business has only one aim - to make as large a profit as possible.