Expensive petrol

Posted on May 29th, 2008 in Driving Emotion,Economy by Julian Edgar


“By pretending it can control prices, the Government is continuing to peddle the lie that it can control everything. It will also perpetuate the illusion that the way we have lived in the past – driving big, inefficient cars – is the way we should live in the future. Prices signal otherwise.”

22 Responses to 'Expensive petrol'

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  1. sean said,

    on May 29th, 2008 at 11:10 pm

    I agree. Oil will run out so we should not be surprised when the price eventually doubles again. Got to love the claim from Brendon Nelson that “petrol will always be cheaper under the coalition”…. and as if fuelwatch is going to help in the long run. For me the lack of a suitible alternative for me to get to work and back means I have to DRIVE 600km per week. There is no train from Ipswich to logan or Gold Coast, But there is a toll road, the Logan Motorway.
    And its gridlock during peak hour depending which way you go, with only 1 or 2 people per car, paying a toll for the honour. So you would think there would be plans for a cross town train with this level of demand. But i think we will have to wait a long time for that, because the drop in toll revenue might upset some people. Smart State indeed!

  2. Russ said,

    on May 30th, 2008 at 11:01 am

    At last, a glimmer of hope that clear, commonsense reporting by the media in general can create understanding, not hype.
    I encourage all readers to send this link to all the people you know who complain of high fuel prices. With luck, enough consumers will begin to clearly understand the ramifications of current economic issues and adjust their existence accordingly. Who knows, the link might make it to Federal Parliament and the rhetoric will change to informative debate…hang on, that’s a bit optimistic…or is it?

  3. Nick said,

    on May 30th, 2008 at 2:02 pm

    I wholeheartedly support more expensive petrol, as long as the extra taxes are used to fund alternative to cars, for example Australia’s bloody woeful public transport network. Australia’s public transport system lags behind every other Western country I’ve visited. I know it’s a big country but if it were to become a priority it could be solved very easily.

  4. Bob jay said,

    on May 31st, 2008 at 2:28 pm

    No, I have not been inhaling it! Its hard to make, it has huge power (way more than most explosives) a and should be treated as something special. Plus the infrastructure already exists to support it.
    In Europe and the UK petrol (and many other things we just take for granted here in the lucky country) is way more expensive and so people generally use it more sparingly. Good for the resource, good for the planet and conducive to ongoing search for viable alternatives.
    We Australians just have to be bought into line and Government can help us more by RAISING prices rather than pandering to the ignorant bleats from the sycophantic mass media.
    I suggest parity pricing with the EU (about $2.50 per litre) would help the country in the long run and not just in narrow automotive terms.
    Example. Higher fuel prices should mean less big dumb SUVs and hence safer roads for everyone else using less fuel in smaller economy cars.
    Example: Reinvigorating the railways for freight would reduce truck numbers on the roads with flow on benefits like reduced road trauma and vastly less wear and tear on country roads. My recent road trips in NSW and SE QLD show just how much damage trucks are doing to rural roads and just how frighteing these road monstors and their pill popping drivers can be..
    Example. Higher fuel prices mean we all drive less. NB The car uses NO fuel when garaged! We halved and then halved again our annual fuel bill by driving less and that comes down to thinking and planning better. Get work closer to home or move home closer to work – we have and were “chaufered” to the city in the excellent City Express services from one house and later on used the then new airconditioned train from another. Just to show that God rewards the sensible, we got splendid capitol gains on selling the inner city properties with their good transport and could semi retire early to the Gold Coast where we even rode bikes to (new) local work for some years. Saved the planet, got fitter and agitated local Govt for more and better bikeways because you need a death wish to ride a bike on the road, plus its bloody rude to hold everone else up. (As an aside the Aussie predilection with home ownership works against labor force mobility and flexibility, but I’ve probably kicked enough sacred cows already).
    The bottom line is that we have to understand a few realities and reducing one’s carbon footprint goes way beyond just cars.
    I remain a car enthusiast and have enjoyed respossible ownership of a string of nice sports sedans which I try to reserve for quality driving times and country touring.
    You can greatly reduce fuel use and cost by lateral thinking and by sensible driving AND then keep a large high performance car if that is your weakness. I’m currently shopping for a nice used Commodore V8 manual just because I want one and can buy one dirt cheap while the lemmings are falling off the financial depreciation cliff . Then if fuel prices stabilize like they have in previous decades I’ll suffer little further resale depreciation and if they don’t I will still enjoy weekends and country trips on less crowded roads knowing that fuel costs are only the smaller portion of the total cost of car ownership.
    Drive less, think more and save $$$ Bob Jay

  5. Jake C said,

    on June 1st, 2008 at 8:31 am

    So how should we freight items items around the country? should primary producers have there produce air lifted out?
    as a side note heavy fuel oil, which is used in fuel fired power stations and large ships has gone from below US$17 per tonne (close enought to 1000L) before the first 70’s fuel crisis to around US$600 per tonne, and this stuff is pretty much the scraps that the refineries cant extract any more quality fuel from, it is so viscous it must be heated to 120 to 150 degrees C to reduce its viscosity enough for use in deisel engines, and requires a good amount of filtering to remove the rubbish in it. So $60c a litre for the privalidge, but with sulphur content by law allowd as high as 4.5 percent would you?
    i’m not worried about fuel prices effecting me, i know they are hurting others though, and moving closer to work, riding a bike (I ride a bike), changing occupatiuons and all these handy hints just isn’t a great an opion.
    maybe it’s not the price of fuel itself, but when they see the price of their petrol/diesel go up and it’s not mirrored by the price of crude oil, and also i know how long it can take for refined fuels to reach the country, and get distributed, and when it’s cost should be seen, and it’s not less than a week.
    so it’s not the overall price that i care about, but how some people/companies go about deciding the price that does.

  6. Paris said,

    on June 1st, 2008 at 12:03 pm

    If moving closer to work, riding a bike, changing occupations or taking public transport aren’t realistic options, then i’ll be a monkey’s uncle. One might not like the idea, but these shifts in social structure and behaviour occur more commonly and forcefully than thought. Australians WILL NOT have a choice over the next 25 years- they WILL be riding more bikes, changing occupations, moving closer to work and taking more public transport. Prices of all consumables are going to rise due to transport costs, etc etc. These aren’t wild predictions, they’re occuring NOW, and will continue.

  7. Kevin Davis said,

    on June 1st, 2008 at 12:21 pm

    The neucleus of all our problems is caused by excessive global population and no matter what we do to solve energy , food production and enviromental problems in the long or possibly medium term wil accomplish nothing. Nature is a cruel master and if we collectively don,t fix it then it will. Religion and cultural differences make this objective difficult. In the last 100 years the world population has allmost quadrupled eve through 2 world wars. The mathematics are exponential , scary. In our own backyard Australia we must define a sustainable population and stick to it no matter what. Be a global example. All of the previous problems will then be solved.

  8. Scott said,

    on June 1st, 2008 at 5:19 pm

    Are you guys serious? You want higher petrol?

    Higher Petrol means higher delivery costs for EVERYTHING, meaning the cost of EVERYTHING goes up. Inflation they goes up because people are spending more (just to get the same product), interest rates then go up and then the recession hits.

    If you want to ride a bike and be green, then go ahead by all means.

    But best to think things thru before wishing for higher petrol prices……

  9. sean said,

    on June 1st, 2008 at 10:13 pm

    I dont see the higher price of fuel to be a bad thing IN THE LONG RUN.The wallet pain of the many will force the change away from petrol that will have to happen, regardless of how much it hurts now. I mean if the taxes were all cut and production increased( hard with peak oil and all) there would not be the finacial(and environmental) incentive for the change untill its really too late. Think of the shock to our economy when petrol really does run out.
    and that could be in 10 to 50 years depending on who you believe.
    The technology to make a big difference is here or so close, the more urgent the demand, the bigger the carrot for the companies that commercialise it fast. I cant see that happen unless petrol gets really expensive like it will and should be.
    Is it really not viable for every house and building to have a solar panel on the roof? The electricity generated would surely make electric cars a viable alternative, with coal power station emissions not increasing because of the extra load, which is the main environmental argument against electric cars.
    And just think of the fact the electric motor makes peak torque at low revs! Fun could still be had…

  10. John Henley said,

    on June 2nd, 2008 at 4:46 pm

    Some have stated that they would like to see higher fuel prices, as in EU/UK. Well I can tell you, higher prices don’t force people off the road or to buy small cars. You can hardly move where I live (UK) for Cayenne S Turbos, ML mercs, Range Rovers and all other manner of 4x4s. More public transport in not the solution either.

    In a world where computer networking is a reality and internet shopping a way off life, the easy and simple way to solve our fuel problems is to work from home. There is no need to commute into a city and sit in the same building as your co-workers. You can sit thousands of miles apart and commicate by phone and computer. If the thought of working from home is unpalatable then local government could encourage the building of combined local offices where you could rent a secure room. You would still have social interaction, but just not with your co-workers. It may even be benificial. Whats needed is a paradign shift if working practices and a complete overhaul in company taxation.

    High street shops are becomming a thing of the past, you can even have your grocery delivered to your house these days. With all these cars of the roads, road freight will be able to move unhindered.

    Australia led the world with education for kids in the outback over the radio, You need to use the same imagination today to show the world how to solve its long term energy problems. It should be relativly easy in Australia, as you only have a small population, so even though your politics is polarised, a consensus should be acheivable. Come Oz show us the way!

  11. sean said,

    on June 2nd, 2008 at 5:27 pm

    John, while I would love to work from home it is not possible for people like myself in the mechanical trades to do so.There will always be a need for “White van men” as you call them.
    I do agree that more office based jobs could certainly work that way ,but the rise of the “soccer mum” dropping the kids of at school in the SUVs you mentioned seem to take their place! It seems children dont have legs or the ability to use public transport anymore…. anyway thats a rant for another day.

  12. Luke Konynenburg said,

    on June 2nd, 2008 at 9:52 pm

    With respect – screw the problem of fuelling cars… I have enough faith in human ingenuity to solve this problem with renewable or alternate sources… What worries me is what do we make plastics and other petrochemical by-products out of? Can you imagine a world without synthetics?

  13. Bob jay said,

    on June 5th, 2008 at 12:57 am

    Bravo! John Henley and Paris too.
    Just a few additional musings on social change if I may…
    When I was a boy in 1950s Melbourne, the Baker delivered breads etc in his horse drawn cart, the Milkman ditto and I was press ganged into mowing the lawn with a push mower. We walked to the local state school and our house was heated with a coal burning stove in the lounge room only. We were not poor; Dad was an Engineer who worked in the city and took the train to the unairconditioned office like everone else. Our Neighbor was the local Postie and he delivered the mail on a pushbike. His family with three teenagers had an Austin A 30 while we luxuriated in a Morris Oxford (with a tweaked 1.6 litre MG A motor slotted in). All pretty low carbon footprint stuff.
    Come the sixties the baker and the milko said that their “hayburners” were too expensive to run and motor vehicles took over. Dad now travelled by air regularly for work but I had yet to leave the ground. He told of big, powerful US cars and the amazing US lifestyle with warm centrally heated houses and how people there took a plane the way we would take a Pioneer bus.
    The seventies saw Australia move forward – cental oil heating for the bigger newer house further out in the leafy suburbs. Dad drove a big Humber to the new Aiconditined office tower out of town by Albert Park. By then we had a motor mower (thank God) and the Old neighbors kids could finally sit comfortably in a big 6 cyl Holden and that powerful car then enabled them to get a caravan.
    Come the eightys and we had five cars in the family. Dad was still driving to work but now in splendid airconditioned comfort (350 Chev engined Statesman). We discovered that driving big, heavy automatic cars made commuting less stressful and a lot safer when clowns crashed into you. By then I too was able to travel by air too.
    In the eightys and ninetys and every man and his dog could afford to fly interstate and overseas (unheard of in my chilhood). Aparently the fuel burn on jetliners is huge and at any one time thousands of people are airborn and pumping tons of CO2 straight into the ozone layer.
    Its year 2008 and kids no longer mow the lawn, instead grown men descend from big utes to mow, whippersnip and leafblow most neighbours lawns using smelly two stroke equipment. Pool cleaners, dog washers etc tear about in white vans while citizens living in oversize airconditioned houses, miles from where they work, drive absolutely everwhere without much thought…
    Need I go on? Just in my lifetime the rate at which we use resources has mushroomed and the mileages people drive amazes me.
    We have to focus on the way we live, not just on the cars we drive. Bob Jay

  14. Russ said,

    on June 5th, 2008 at 3:02 pm

    Eloquently put, Bob Jay! It is amazing.

    However, I can’t see any change occurring until the cost of these ‘luxuries’ becomes out of reach. Today’s society is so focussed on spending money to survive that they no longer help themselves. It’s simply easier to pay and keep paying.
    When fuel reaches $5/litre, power costs several $ per kilowatt hour not cents, and water is sold by the litre not megalitre, then the public will really begin to appreciate what they have and use it accordingly. Education on self preservation has to occur somehow.
    We have to change the way in which we exist on this planet. It’s the only one we have! No second chances.

  15. Rich said,

    on June 6th, 2008 at 3:00 pm

    The Gov should scrap stamp duty on home purchases (not investment houses) so that the workers can move closer to their place of work without adding tens of thousands to their mortgage.

  16. Scott said,

    on June 9th, 2008 at 11:20 am

    What about LPG? I’m surprised no one has mentioned it yet!

    My wife and I privately converted our VS V6 Commodore back in 2002 when LPG was about 35c/L and from memory petrol was about $1/L and people were whinging then! Now LPG is about 65c/L and petrol is about $1.55/L and more sometimes.

    It took us less than a year to pay off the conversion back then (~$1200 after WA state gov rebate) and since then I suppose you could call our savings ‘profit’, not only are we using a local resource (WA North West shelf), we are still saving money every time we visit the servo.

    What excites me about LPG systems out nowadays are the new vapour injection systems (we have a conventional venturi system), the Keihin (sp?) injectors in these kits are capable of injecting LPG, CNG and… Hydrogen! These systems cost about $4k – $4.5k to install, the federal government will give a $2k rebate and if you’re lucky enough to live in WA the State Government will give you a further $1k.

    So my suggestion? Stop using foreign oil!! If you have to drive, think in terms of alternatives! The rest of the world already is, Australia is lagging behind! I am very much interested in viable alternatives, especially when they are affordable, already available and have been for some time!

  17. Julian Edgar said,

    on June 11th, 2008 at 8:14 am


  18. Nicholas said,

    on June 11th, 2008 at 5:37 pm

    Oil/fuel prices are simple economics and regretfully whatever you do be it LPG/CNG or any non renewable/plentiful resource is naturally going to cost more when demand outstrips supply. In the current world state. it’s not that we are producing less fuel or it’s running out but that the demand has increased.. namely by those growing economies of the world (AKA CHINA) and the only mechenisim that will halt demand is price sentivity..wherby it’s just not worth buying at that price. So what will happen is the demand will increase for the next viable alternative. The point is you can save all you want by garaging or driving less or ridding a bike.. but it wont help bring the price down.. it will never go down as long as there is this entity sucking the world resources dry and it just ain’t about oil..why do you think sharks, tigers, rhinos are dissappearing…it’s all about demand! who else has any use for sharks?? or Rhinos?? Well i rest my case..and don’t even think water is a fuel(hydrogen) source cos’ thats limited too! and belive me it’s a whole lot worse when you are thristy and out of fuel!

  19. Scott said,

    on June 12th, 2008 at 12:14 pm

    Thanks for the economics lesson Nicholas. I’m sure most of us are well aware of the supply and demand curve by now. However you don’t really point to any alternative, in fact you are shying away from that in Hydrogen, LPG and CNG. Perhaps they are the most viable alternatives for the time being, which use current technology (well perhaps Hydrogen isn’t readily available…yet). I disagree that once demand shifts from petrol to the next viable alternative, there won’t be a drop in oil prices. If demand drops off significantly, the price will need to be lowered to maximise the profits of ‘big oil’. I agree that that will probably shift the pricing issue to a different resource, but it’s not all doom and gloom. If people want to pay less right now, they have alternatives in LPG, more fuel efficient cars and soon a plug-in electric car at (Nissan announced a model recently to be released in 2010 or so).

  20. Dimma said,

    on June 12th, 2008 at 1:47 pm

    O my god… Not a single sensible comment here. Have we been so brainwashed by the mass media that no matter what we critisize, the critique will allways stay within the “accepted” framework ? Supply-demand curve, overpopulation, peak oil… Wake up! Speculative economy is at fault here. And what does the government do to discourage the speculative economy and encourage a real (value-add) one? -nothing! What is the point of screaming that we need an ethanol industry in Australia and the govt needs to subsidise the establishment of that industry when it will be bought out by the oil companies as soon as it is built using the taxpayers money. What does the government do to stop the takeover of the vital industries by the foreign interests? -nothing! What about us carrying the burden of a private banking/financial system on our working shoulders? The list goes on. As long as we continue to believe that “globalisation” and “economic liberalism” are inevitable and we just have to submit to those gods – all these discussions will be just musings about nothing. (By the way – the real price of oil is $28 per barrell. 100 bucks extra is the price of the speculative economy).

  21. Jacky said,

    on August 7th, 2008 at 10:54 pm


  22. Scott said,

    on August 8th, 2008 at 1:57 pm

    Sounds like a bit of socialist bullcrap your spewing there mate. The real price of oil is what it is, it’s the price the oil companies choose to maximise profits at the end of the day. It has everything to do with supply and demand and it always will, in this country at least.

    If we as a country had massive oil reserves owned by the people and administered solely by the government with no third party contracts etc. Then yes, we could perhaps have oil for ‘the real price of oil’ of $28 per barrell (or whatever the price actually is to get it refined and then to the bowser). At the moment that’s just not going to happen. We have massive gas reserves and we still pay world prices for LPG and Natural gas, because a third party company is the one supplying it. Do you expect them to make no profits whatsoever selling the gas to us for cost price rather than selling it overseas for massive profits based on the global price? I think you’re the one that needs to wake up mate!