Petrol Prices!

It’s official.  It is now way too expensive for me to drive to work.  I drove in yesterday and was running low on petrol on the way home and had no choice but to fill up and was horrified at the price of 129.9 a litre on all the petrol stations on Parramatta Rd.  It seems that the hurricane in Louisiana has suddenly made petrol jump 10c a litre in a mere 10 hours.  On the way into work, I was thinking of filling up but was running late and decided I would get it on the way home.  It was 119.9 a litre and the radio was telling me that oil had jumped to over US$70 a barrel and that the reason was this hurricane in the US.

It seems that a bit of a storm (it was downgraded to a Category 2) in the US’ Deep South suddenly made the petrol in our bowsers jump 10c in a mere 10 hours!!

I understand petrol is expensive, but I just think the combined effects of petrol company price collusion, over sensitivity to events on the other side of the world like hurricanes and our compounding effect taxes (GST on top of stamp duty on top of import tax) means that we suddenly have price swings of 10+ cents per litre for what I would consider trivial matters.

The government needs to look at the tax structure on petrol.  When petrol was in the 80-100 cent range, they made statements that the taxes were cheap and that in comparison to the rest of the world we had “cheap” petrol.  I didn’t buy that then and now with rampant oil prices, I am certainly not buying that argument now.  The government, as a flow on effect, is now reaping in huge amounts of fuel excise and must bring their tax rates down or the effect on the average householder is going to be dramatic.

For example, we talked at home about getting rid of one of our cars.  We have two – do we need them.  Yes its convenient on weekends and for social activities during the week, but at the prices of petrol, rego and tolls is it worth it?  At this stage we will preserve, but what about when it reaches 140 cents or 150 cents a litre??

On the positive side, the CEO of Forbes and leader of the CEO Conference in Sydney this week which is a gathering of the worlds top 350 business leaders predicts that oil prices will fall dramatically in the next 12 months and go back to US$35 a barrel.  God I hope he is right!