Diesel pricing

Submitted: Wednesday, Apr 09, 2008 at 17:41
ThreadID: 56477 Views:2344 Replies:20 FollowUps:27
This Thread has been Archived
Why does Australia seem to be one of the very few countries in the world where the pump price of diesel is greater than that of ULP (or sometimes even greater than PULP)?
Back Expand Un-Read 0 Moderator

Reply By: KSV. - Wednesday, Apr 09, 2008 at 17:57

Wednesday, Apr 09, 2008 at 17:57
Do you like to talk about this?
AnswerID: 297618

Reply By: Gramps (NSW) - Wednesday, Apr 09, 2008 at 18:01

Wednesday, Apr 09, 2008 at 18:01
That's just one of the privileges when you own a diesel :)))

AnswerID: 297621

Reply By: Member - Barnesy - Wednesday, Apr 09, 2008 at 18:11

Wednesday, Apr 09, 2008 at 18:11
Anyone feel free to correct me but I thought that Australia set it's diesel prices in line with Thailand. I have no idea why, but diesel is expensive there due to low usage.

None of it makes sense to me for the obvious reasons of diesel needing less refining etc etc. Australia is unique among most countries in the world, especially country areas, due to long distances between places and the only way to get there is using diesel powered vehicles where high prices hits the pocket.

Did you know that coal mines in Queensland get multimillion dollar subsidies for their diesel usage from the government? The coal companies don't need that money, maybe it could be put to better use developing renewable biodiesels obtained from non-food crops?

Barnesy
AnswerID: 297623

Follow Up By: Ianw - Wednesday, Apr 09, 2008 at 20:09

Wednesday, Apr 09, 2008 at 20:09
Basically, Our diesel prices are based on the Saudi price of oil. Petrol prices are based on the Singapore price.

Ian
0
FollowupID: 563708

Reply By: Member - David P (VIC) - Wednesday, Apr 09, 2008 at 18:16

Wednesday, Apr 09, 2008 at 18:16
Asians don't want petrol, we compete with them on the Singapore market (Tapis) for the heavy stuff....not enough supply ,too much demand....silverback
AnswerID: 297625

Reply By: Saharaman (aka Geepeem) - Wednesday, Apr 09, 2008 at 18:32

Wednesday, Apr 09, 2008 at 18:32
A few weeks ago there was a segment on one of the current affairs program about this issue. The claim was that Refineries make their money out of diesel not petrol - it was stated the refinery gross margin on diesel is about 30 cents a litre and only 5 cents a litre for petrol as diesel is a lot cheaper to refine.
It never used to be like this - in the early 1980's we bought a gemini diesel and it was consistently cheaper than petrol at that time - about $19 to fill up the Gemini I recall.
AnswerID: 297628

Reply By: Member - Geoff C (QLD) - Wednesday, Apr 09, 2008 at 18:33

Wednesday, Apr 09, 2008 at 18:33
I n Toowoomba yesterday there was 23 cents, yes 23 cents, difference between ULP and diesel. Tell me we're not being ripped off.
When the differenc was less than that I had a go at our local member about it and after fighting my way through the bulldust he reckons that its not that diesel is too dear its that petrol is so cheap and he was a minister in the previous govt.
We plan on doing a 15000km trip this year in my Patrol ute towing a tandem caravan, may take us longer than we thought.
I hate being treated as a fool.
Geoff
AnswerID: 297630

Follow Up By: Truckster (Vic) - Thursday, Apr 10, 2008 at 14:44

Thursday, Apr 10, 2008 at 14:44
23cents is normal now.. try over 30cents somtimes on way to twork.
0
FollowupID: 563819

Reply By: Notso - Wednesday, Apr 09, 2008 at 18:37

Wednesday, Apr 09, 2008 at 18:37
Glad I have the Triton

Point to point Forbes NSW to Burwood Vic via Echuca and some running around Echuca Deniliquin. 859 Kilomteres average fuel consumption 8.1 litres /100 ks. Average speed 90 kmh

Return Trip 706 ks average speed 92 kmh fuel consumption point to point Burwood Vic to Forbes NSW 8.5 litres/100ks

Not bad for something weighing 2 tonnes
AnswerID: 297631

Follow Up By: Member - barry F (NSW) - Wednesday, Apr 09, 2008 at 18:45

Wednesday, Apr 09, 2008 at 18:45
They are reeaal good figures. Pardon my ignorance, but is the 2t the weight of vehicle alone?
0
FollowupID: 563677

Follow Up By: Notso - Wednesday, Apr 09, 2008 at 19:04

Wednesday, Apr 09, 2008 at 19:04
It is just on 2 tonne empty, put the pair of us and all the gear the missus wants to take with her on a 4 day trip and you'd add another 200 odd kilos.

0
FollowupID: 563681

Reply By: DIO - Wednesday, Apr 09, 2008 at 18:47

Wednesday, Apr 09, 2008 at 18:47
Because they can AND most diesel is purchased by commercial users many of whom receive significant rebates. Therefore, there is no need for the oil companies to give the product away at reduced prices. Sorry if that's not what you wanted to hear.
AnswerID: 297632

Follow Up By: Member - Footloose - Wednesday, Apr 09, 2008 at 20:33

Wednesday, Apr 09, 2008 at 20:33
And commercial concerns can count it as a cost of production ie tax deductable. Not like we poor people.
0
FollowupID: 563727

Follow Up By: Steve from Top End Explorer Tours - Wednesday, Apr 09, 2008 at 23:03

Wednesday, Apr 09, 2008 at 23:03
WHAT REBATE???????????????????????

I will use over 1000 lts per week at $1.71 per lt.

No rebate for me.

Cheers Steve.
0
FollowupID: 563745

Follow Up By: The Landy - Thursday, Apr 10, 2008 at 19:27

Thursday, Apr 10, 2008 at 19:27
Which potentially can be claimed as a business expense and with offsett for GST payments.
0
FollowupID: 563892

Reply By: Member - Shane D (QLD) - Wednesday, Apr 09, 2008 at 19:38

Wednesday, Apr 09, 2008 at 19:38
In Brisbane, there was difference in price of 24 cents this morning, now its 7 cents, big jump today
Shane
AnswerID: 297648

Reply By: Jim from Best Off Road - Wednesday, Apr 09, 2008 at 20:53

Wednesday, Apr 09, 2008 at 20:53
LPG a constant 60 cents a litre in Melbourne.

I cannot, do not and will not ever understand the obsession with diesel 4wd's.

AnswerID: 297671

Follow Up By: pop2jocem - Wednesday, Apr 09, 2008 at 22:30

Wednesday, Apr 09, 2008 at 22:30
Jim,
I own a diesel 4by and apart from safety (less flammable) and availability in some remote areas being in favour of diesel I am beginning to wonder if owning one is such a smart idea. Where I am in WA the price difference is about 20c per lt in favour of petrol!!!

Cheers Pop
0
FollowupID: 563742

Follow Up By: KSV. - Thursday, Apr 10, 2008 at 10:36

Thursday, Apr 10, 2008 at 10:36
Jim,

Very simple. Apart of better torque my main reason I can drive more on same tank. And BTW LPG 4WD actually called “shopping trolley” :-P

Cheers
Serg
0
FollowupID: 563794

Follow Up By: Jim from Best Off Road - Thursday, Apr 10, 2008 at 20:57

Thursday, Apr 10, 2008 at 20:57
Serg,

You are about as sharp as bowling ball LOL.

Torque is vastly overated.

0
FollowupID: 563919

Reply By: marq - Wednesday, Apr 09, 2008 at 21:20

Wednesday, Apr 09, 2008 at 21:20
Price is because the fuel companies can charge what they like (according to a certain govt dept)
AnswerID: 297675

Reply By: geocacher (djcache) - Wednesday, Apr 09, 2008 at 22:55

Wednesday, Apr 09, 2008 at 22:55
It's interesting. I complained to the ACCC - I know it's pointless but I was a bit grumpy at the time and it made me feel better - about the price of diesel jumping to $1.639 a ltr on the day before Easter at Lakes Entrance, when it was still about $1.53 in Bairnsdale.

They actually rang me back a week or so later and the bloke agreed that the price was substantially higher than diesel in Gippsland at the time, but didn't appear all that interested in it. This is despite the fact that the company who owned the servo in question has a chain of them running further up the hwy to Melbourne, and they would have been selling the same fuel at market prices in Sale Traralgon etc.

He did explain though that other than the price cycle issues, the other issue with diesel vs unleaded was that diesel prices were based on some other barrel price (I can't recall what he called it) other than the Singapore Light Crude price that unleaded is based on.

He explained that over the past 18 months the diesel wholesale barrel price has been creeping up faster than the Singapore Light Crude price.

A reason given for this was that the massive growth in car ownership in China and India has largely been in diesel powered vehicles. This he said has been driving the supply demand issue that has seen the growth in demand for diesel in Asia push the price of diesel up faster than that of petrol.

I still think it's screwed that we get charged so much. I'm convince that the government and the ACCC don't care and short of tax reduction on fuel or regulation of price are powerless to stop the fuel cartels, oops, I mean companies. (Then again OPEC is a cartel...)

But it's the first plausible explanation I've heard to explain what I see each week at the pump.

Dave
AnswerID: 297691

Follow Up By: Hairs - Thursday, Apr 10, 2008 at 11:03

Thursday, Apr 10, 2008 at 11:03
Hi Geocacher,
Family went to Evans Head for Easter camping as we do each year. I drove into town on the Easter Thursday at about 11.00 am. I nearly ran off the road and broke my neck when I saw the price of Diesel at the servo. It was $1.43.9 and it stayed at that price until we left the following Friday a week later. Which fairly cheap for us normally. At Woodburn it was $1.509, which is on the HWY. In Lismore the same weekend, two servo's within 200 meters had a difference of 19 cents a litre.When I got back and needed to fill up again in Grafton at the BP I mention to the attendant why their price was $1.519, she told me it was the cheapest in the state. I said I could of bought it for $1.439 on Easter Sunday. She told me I was having a lend of her.
I too have read that the reason it is becoming dearer is because od demand in India & China.
What I want to know is why the is such huge price differences for no apparent reason.

Jon
0
FollowupID: 563800

Follow Up By: Truckster (Vic) - Thursday, Apr 10, 2008 at 14:45

Thursday, Apr 10, 2008 at 14:45
>> but didn't appear all that interested in it.

dont say things like that, you could cause cardiac arrest in people..
0
FollowupID: 563820

Follow Up By: geocacher (djcache) - Thursday, Apr 10, 2008 at 21:34

Thursday, Apr 10, 2008 at 21:34
:o)

But at least I can treat that Truckster...

Dave
0
FollowupID: 563930

Reply By: OzTroopy - Wednesday, Apr 09, 2008 at 23:19

Wednesday, Apr 09, 2008 at 23:19
The historical reasons for owning a Diesel.
1/. Better pulling power under load,
2/. Able to operate WITHOUT a battery,
3/. Longer lasting engine,
4/. Fuel available from any farmer in an emergency,
5/. Better fuel economy than a comparable sized petrol engine,
6/. Cheaper price at the pump.

Bought my first 4b in 1979 when dieso was half the price of petrol. Have seen a diesel cruiser run on oil, straight out of the oilfield ( might depend on when the dinosaur died of course ). Never used used to worry about getting a flat battery.

Today I own petrol 4b's as the diesel concept has been destroyed, fuel prices are chraged out at " what can we get " rather than " whatis it worth " pricing and petrol motors have been improved in terms of strenth and torque ratios. As all new vehicles are full of unnescessary computer components, a new diesel is not worth considering for general use.

My........how things have changed for the better, as technology works for us.

AnswerID: 297694

Follow Up By: Leroy - Thursday, Apr 10, 2008 at 09:55

Thursday, Apr 10, 2008 at 09:55
I think the gloss of owning a diesel has been lost a little. I needed a charged battery to roll start mine, ah electronics!
The price difference is about 18c where I am. I would think a bit harder before buying another diesel again as I don't think the benefits are there now apart from outback availabitly and range.

Leroy
0
FollowupID: 563785

Follow Up By: The Landy - Friday, Apr 11, 2008 at 12:51

Friday, Apr 11, 2008 at 12:51
That's an interesting point OzTroopy and with the new emission rules on diesel, requiring a reduction in the sulphur content, diesel is becoming more expensive to refine. I also think the dynamics of owning a diesel vehicle is changing especially as you say petrol motors are improving.

0
FollowupID: 564037

Reply By: MrBitchi (QLD) - Thursday, Apr 10, 2008 at 10:33

Thursday, Apr 10, 2008 at 10:33
This is the benchmark

AnswerID: 297729

Reply By: robak (QLD) - Thursday, Apr 10, 2008 at 10:52

Thursday, Apr 10, 2008 at 10:52
Rodbart

Perhaps the answer lies in the question, "Why is diesel in Australia cheaper then in most other western nations?"

R.
AnswerID: 297731

Reply By: Member - Mottleman (NSW) - Thursday, Apr 10, 2008 at 11:37

Thursday, Apr 10, 2008 at 11:37
Not sure of the truth of this but someone told me that....

In the greens-liberal negotiations around the GST introduction the greens lobbied for an extra tax to be put on 'dirty diesel fuel' for their help in getting the GST through.
The thinking was that trucks over 5T were eligable for tax/fuel rebates and other business users of diesel would claim 10% back through the GST and so the people that pay for this is private users mainly of 4WD's.
Now there are more small and clean diesel cars on the roads I wonder if anything will change.

cheers
John
AnswerID: 297738

Follow Up By: Truckster (Vic) - Thursday, Apr 10, 2008 at 14:47

Thursday, Apr 10, 2008 at 14:47
diesel is subsidsed in other countries as its cleaner. so that theory goes to bleep , but it does involve the greens, so goes without saying.

>> Now there are more small and clean diesel cars on the roads I wonder if anything will change
captive audience? Coles/Woolies are laughin all way to the bank. it aint shell/caltex to be pisssed off at.
0
FollowupID: 563822

Follow Up By: Hairs - Thursday, Apr 10, 2008 at 15:36

Thursday, Apr 10, 2008 at 15:36
>>In the greens-liberal negotiations around the GST introduction the greens lobbied for an extra tax>>

Wouldn't surprise me at all what those mongrels would do.
Someone is always in bed with the Greens just to get some legislation through. I know this is of topic, And for Bob Brown being an environmentalist he is one of the biggest carbon uses of all the pollies cause he flies everywhere. Thats being responsible ;( Hypocrite

When it comes to the greens the only wilderness is between their ears. ;)
0
FollowupID: 563832

Follow Up By: DarrynJ - Thursday, Apr 10, 2008 at 19:51

Thursday, Apr 10, 2008 at 19:51
Wasn't the Greens fella's it was the Dimocraps (Democrats) who demanded it as a trade off for passing the GST. Which brings up the point as to why we are taxed twice on fuel - Excise and then GST on the pump price which is always higher in the country. When the Liberals under John Hewson first proposed a GST the intention was to remove Excise and I remember Hewson and the local member here Peter McGauran took over a servo in Leongatha I think and sold fuel at the price it would be under their version of the GST and I think ULP would have been about 0.40 c/l to 0.45 c/l then - it was early 1993 during the Federal Election campaign that year.

Cheers Darryn
0
FollowupID: 563899

Follow Up By: Truckster (Vic) - Thursday, Apr 10, 2008 at 22:57

Thursday, Apr 10, 2008 at 22:57
Hewson didnt know what he was talking about.. he was made to look like a fool 3-4 times, I think the best was by Ray Martin if I remember - he couldnt explain GST or answer Rays questions... funny!
0
FollowupID: 563954

Follow Up By: DarrynJ - Friday, Apr 11, 2008 at 16:54

Friday, Apr 11, 2008 at 16:54
I don"t think any politician knows what their talking about, they just follow the party line and say what the advisors tell them to say. Its annoying that Excise managed to stay while we pay GST on top of it. Ray Martin would be a Labor man like most of the TV "Personalities" and would have probably set Hewson up as that would have been the interview with the cost of the cake I think.
Cheers
0
FollowupID: 564067

Reply By: The Landy - Thursday, Apr 10, 2008 at 16:14

Thursday, Apr 10, 2008 at 16:14
Some of the facts……

Diesel is a mid-distillate similar to heating oils, kerosene and jet A1 fuel. As such the production of diesel is in competition with these other products. Demand for the various products is cyclical. For example, the Northern Hemisphere has been in winter and demand for heating oils and consequently production has been higher. There is only so much fuel a refinery can produce and it will be directed according to demand.

The cry often that often goes out as to why pricing in Australia is linked to the price of the product in Singapore and what has demand in other countries got to do with the price in Australia. The answer is simple; fuel, in any form, is a commoditised product and therefore supply and demand issues, no matter where they occur will affect the price of the fuel. We live on an island for sure, but we are part of a global economy.

Other considerations include the fact that the use of diesel powered vehicles is higher in other countries than it is in Australia, and this, combined with surging demand from industry, both in Australia and abroad is putting pressure on the supply of diesel from the refineries.

At the end of the day we can argue every day about the price of fuel and whether it should be 10 cents higher or lower at any given time (and this is another issue altogether), however the reality is that the base input for fuel, oil, is in high demand due, in part, to the surging economic growth in China and India and as a consequence high oil and fuel prices are here to stay.

As for the daily price variations this is the discounting cycle at work, it is well documented, and without doubt we are better off for it. Those that argue for an end to these price variations are effectively asking for an end to the discounting that brings these variations about – the end result, you pay a higher price everyday instead of on selected days.
AnswerID: 297800

Follow Up By: The Landy - Thursday, Apr 10, 2008 at 17:35

Thursday, Apr 10, 2008 at 17:35
Rodbart

Just as a footnote the higher price of diesel versus petrol is not just an Australian thing and you'll find that is the case in most other countries.



0
FollowupID: 563863

Follow Up By: Rodbart - Thursday, Apr 10, 2008 at 17:42

Thursday, Apr 10, 2008 at 17:42
Thanks, Landy. Some interesting stuff in your reply. I appreciate that there are world - wide demands for the mid-to-heavy oils. However, diesel prices overseas remain LOWER than their petrol prices. Why don't they reflect the 'demand'?
I know we're dealing with an increasingly scarcer resource and prices WILL go up but the price relativity between petrol and diesel in Aust. is very suss.
0
FollowupID: 563866

Follow Up By: The Landy - Thursday, Apr 10, 2008 at 18:21

Thursday, Apr 10, 2008 at 18:21
Hi Rodbart

I’m not sure that the price of diesel is cheaper in other countries. In the US, for example, the price of diesel is more expensive than petrol. The UK is similar, that is on average diesel costs more than petrol.

On April 7 the average price of petrol across America was US$ 3.35 per gallon, whilst the price of diesel was US$ 4.01 per gallon. Expressed as a percentage the average price of diesel was 16% higher than petrol.

If you look at the Exploroz fuel watch today (acknowledging 3 days later) the average cost of diesel in Australia is 9% higher than petrol.

Another important factor affecting the price of diesel is the new emission standards that have been introduced across a wide number of industrialised countries. These standards require lower sulphur content and this has changed the refining process for diesel and increased the cost of production.

It’s an interesting topic and one that produces plenty of emotion, as it should when it hits the hip pocket, but often the facts are easily overlooked in our search for answers. And I’m not intending to have a go at you….just trying to look at it objectively.

Cheers
0
FollowupID: 563871

Follow Up By: The Landy - Thursday, Apr 10, 2008 at 18:23

Thursday, Apr 10, 2008 at 18:23
Whoops.....that was the average cost across New South Wales, and not the national Australian average I quoted. But still a reasonably fair comparison.
0
FollowupID: 563872

Reply By: Hairs - Thursday, Apr 10, 2008 at 22:18

Thursday, Apr 10, 2008 at 22:18
I’m having a guess here, but I think what gets up every bodies nose about fuel prices in general is that all governments tell us that they feel our pain, yet their happy to be getting the % in taxes/ revenue from higher fuel prices! So in reality they don't give a toss what fuel costs.
The higher the pump price the more tax they receive.
I also believe that the people in government that that can make a difference won't because if fuel was $3.00 a litre it still would not hurt them in the hip pocket.

And that's my 0.03 of a litres worth, @ $1.50 per litre
AnswerID: 297896

Reply By: wdric - Friday, Apr 11, 2008 at 16:59

Friday, Apr 11, 2008 at 16:59
Just to put thing into persective.
I received this reply from a customer who was travelling from England to NZ in his 80 series.

I fell off my chair, you can't buy water for that.

Quote
Thanks for adding our webpage as a link from your website... all the publicity we can get always helps!

I must say your Longranger tanks were really great during the expedition...
especially in Iran where we paid 2c a litre for diesel... we filled up everything we could ;o)

Ric
www.thelongranger.com.au

AnswerID: 298002

Follow Up By: wdric - Friday, Apr 11, 2008 at 17:03

Friday, Apr 11, 2008 at 17:03
This price would have been about one year ago.
The guy hasn't made it to NZ yet and is living in Sydney.
How would you feel pulling up at the bowser in AUstralia after that
0
FollowupID: 564069

Follow Up By: The Landy - Friday, Apr 11, 2008 at 17:14

Friday, Apr 11, 2008 at 17:14
"How would you feel pulling up at the bowser in AUstralia after that" ..............

Lucky...that I made it! Great story.........but I don't see anyone rushing off to take advantage of the pricing any time soon.
0
FollowupID: 564071

Reply By: Hairs - Sunday, Apr 20, 2008 at 19:18

Sunday, Apr 20, 2008 at 19:18
A question.
Other countries that do not produce the bulk of their own crude oil, do their resident's pay the same a we do per litre for diesel? Taking in to account, exchange rates, and such things.

Just curious, ;-)
AnswerID: 299485

Follow Up By: The Landy - Monday, Apr 21, 2008 at 10:09

Monday, Apr 21, 2008 at 10:09
Following are statistics compiled by the Department of Industry, Tourism and Resources covering OECD countries.

International Price Comparisons

0
FollowupID: 565776

Sponsored Links

Popular Products (14)