Fuel prices

Submitted: Thursday, Mar 15, 2012 at 22:29
ThreadID: 92540 Views:1722 Replies:7 FollowUps:6
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We often hear about how the weather - normally winter - in the northern hemisphere affects our fuel prices and drives them up.

Just talking to my son who lives in the northern USA where they still have snow and rather unsavoury weather at the moment and diesel is selling at the extraordinary price of 91 cents per litre - thats about 89 cents Australian!! My sister in law in Canada says it is up to $1.10 a litre there (and it is snowing) and there is almost revolution on the streets.

Can somebody remind me why we are paying the prices we do here.

Longtooth
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Reply By: mikehzz - Thursday, Mar 15, 2012 at 22:48

Thursday, Mar 15, 2012 at 22:48
I'm not bashing Americans, I never met one I didn't like....but they have 2% of the world's population and use 20% of the worlds oil. We should in a friendly way try and ask them to put the price up so they don't use it so quickly. Like it or not we are running out. Cheers
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Reply By: Kimba10 - Thursday, Mar 15, 2012 at 23:02

Thursday, Mar 15, 2012 at 23:02
Cause we have a pack of wankers running the country with no balls to stand upto anything or anyone. Just told my wife Ill be glad I wont be around in 50 years cause this country is going to be screwed..........
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Follow Up By: mikehzz - Thursday, Mar 15, 2012 at 23:34

Thursday, Mar 15, 2012 at 23:34
I think we could take wanking lessons from the UK and Europe. Petrol is over 2 bucks a litre there. We could drop the price to 50c a litre and all afford to drive V12s. Then we could run the oil dry and screw the place heaps quicker than 50 years.
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Follow Up By: kevmac....(WA) - Thursday, Mar 15, 2012 at 23:45

Thursday, Mar 15, 2012 at 23:45
We are linked price wise to The Singapore Price for crude is one reason for price differential. The other is that we do not refine a great deal of fuel grade crude oil(ours is the wrong type of crude)
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Reply By: Hairs & Fysh - Friday, Mar 16, 2012 at 07:21

Friday, Mar 16, 2012 at 07:21
Hi Longtooth,

"Can somebody remind me why we are paying the prices we do here. "

We have a fuel commissioner that sits on his backside and watches the price, that's his job, not a bad Gig if you can get it.
We also have a tax system where the government rakes in more from the the higher pump price and they don't pay for their fuel, we pay for it. It could be 3 buck a lt, they don't give a toss.
Beside all the other reasons, Singapore, demand, super refineries in Asia and so on.

What can we do about it?

Squat all your Honor.





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Reply By: Bazooka - Friday, Mar 16, 2012 at 13:09

Friday, Mar 16, 2012 at 13:09
Here we go again. The basics are simple - supply and demand - plus or minus political issues in the main supply regions and a little market speculation from time to time - primarily drive international oil prices.

Parity oil pricing was introduced in Australia by the Fraser conservative govt decades ago (1978), at least in part to help local producers to remain competitive and encourage exploration in Australia. It has been very successful in that regard.

But as we know govt tax makes up about 25% of the bowser price - 38c/litre (down from 47c in 1999). The indexation of petroleum products excise rates was abolished in 2001 so the govt's take is actually lower than it was a decade ago, even when you add in GST.

In the good ol USA, local, state and fed taxes add from 26.4c per gallon (Alaska) to 67.5c/g (California) - average across all states of 48.9c/g. In our 'money' that is just 12.9c/litre on average.

Now take a look at the current budget situations in Australia and the USA. American national debt is >100% of GDP and their budget deficit is $1.2Trillion, about 9% of GDP with little prospect of a return to surplus for decades. Australia's debt to GDP is ~22% with a deficit of ~1.5% of GDP and a likely return to deficit within 1-2 years. Surely that tells you something.

Oil prices have 'stabilised' somewhat as a result of the GFC and the only reason our pump prices haven't reached $2/litre (average) is because of the current high rate of the $A. Things won't be getting any easier on the fuel cost front and apart from 'fiddling at the edges' there is little govts can do about it.
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Follow Up By: Bazooka - Friday, Mar 16, 2012 at 13:11

Friday, Mar 16, 2012 at 13:11
....and a likely return to SURPLUS within 1-2 years
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Follow Up By: Bazooka - Friday, Mar 16, 2012 at 14:58

Friday, Mar 16, 2012 at 14:58
By the way the average diesel price in Canada this week was 129.5
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Follow Up By: Bazooka - Friday, Mar 16, 2012 at 15:55

Friday, Mar 16, 2012 at 15:55
Another error:

....govt tax makes up about 35% of the bowser price (not 25%)
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Reply By: olcoolone - Friday, Mar 16, 2012 at 13:26

Friday, Mar 16, 2012 at 13:26
Don't blame the fuel companies for all the greed..... the old US of A pays around 11 cents per litre of fuel give or take a few cents in fuel excise.

AND here in the lucky country Australia the poor government takes a measly 60 to 70 cents per litre.

As it's always been said the government looks at vehicle drives as a cash cow.... the same way they look at drinkers and smokers.

Sure fuel is always going to be more expensive here in the lucky land due to freight, distribution costs and volume sold..... so if you take out the governments small amount of excise we are paying around the 80 to 90 cents per litre mark.

And why doesn't the government investigate the fuel companies.... firstly why would you kill the golden goose and secondly maybe an investigation may bring up to much dirt about the government and how they take nearly half of the cost of fuel per litre.

http://en.wikipedia.org/wiki/Fuel_tax
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Follow Up By: Bazooka - Friday, Mar 16, 2012 at 15:52

Friday, Mar 16, 2012 at 15:52
I think your figures are inaccurate Olcoolone. Govt tax is ~53c/l for diesel including GST, which is nowhere near half the cost (actually 35%).

Weekly Diesel Prices Report

Governments have "investigated" oil companies on numerous occasions - they've got reports coming out of their ears - and apart from the odd bit of suspected (unproven) local collusion they invariably report the same things. Neither suppliers nor resellers are making massive profits on their turnover and competition is the best way of keeping retail prices down. That's not to say oil companies are squeaky clean as some independents can attest. Not everyone gets the same wholesale deal it seems. Retailers Coles/Woolies were recently accused of price gouging by the AAA (their margins went up a couple of cents/litre).

Australia can do without a highly paid Petrol Commissioner in my opinion. Cut the budget and let the ACCC continue to manage it as they did prior to that specific role being created. It's expensive political window dressing.

A general observation: I could be wrong but it seems many people who get hysterical about the relative small margins being earnt by oil companies are the very same ones who think it's okay for big multinational mining companies to make super profits on the back of our resources. Weird, or as the Americans would say - go figure.
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Reply By: Rockape - Friday, Mar 16, 2012 at 13:43

Friday, Mar 16, 2012 at 13:43
Me thinks we always believe the grass is always greener on the other side of da fence.

RA.
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Reply By: The Landy - Friday, Mar 16, 2012 at 16:01

Friday, Mar 16, 2012 at 16:01
Following is a breakdown of the price you pay at the pump...

Australian Terminal Gate Price (TGP) Composition is roughly...

Singapore Gasoil (diesel): 59%
Excise (government): 24%
GST (government): 8%
Other: 9%

Other includes, freight, distribution & storage, sales & marketing, insurance, & refinery margins (refiners’ revenue).

It is worth noting that recently Caltex indicated that it is reviewing its long-term refining commitment in Australia, in a nutshell, the revenue generated doesn’t match the capital required...in a release to the ASX in late February it said, "Decision on refinery review approximately six months away – considering all options to improve shareholder value, ranging from investment to closure."

Mobil closed Port Stanvac many years ago because the cost of upgrades to meet government requirements didn’t meet the revenue versus capital required argument.

You'd be wrong to think that fuel refiners are making a lot of money out of refining oil into a petroleum product...

And my tilt on prices, the world is consuming more and more each and every day, so there is only one way prices will go in the long term - up!

The Landy


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