Oil price drop sees no fall at bowser

o

there is simply no reason to people will still pay high prices

Reckless1

Not defending the oil companies, since they gouge all they can, but have you perhaps noticed that the $AU has gone from 97 to 66? That’s going to affect the price at the bowser.

Very rough calculation –
$US147 oil @0.97 = $AU152 = $1.70 at the pump
$US80 oil @0.66 = $AU122 should equal 122/152*1.7 = $1.36 at the pump.

Are they still gouging? Oh, yes.

Ra

AS much as I hate fuel consumption I totally agree.

The price of fuel has not fallen with the massive drop in price of oil.

Even with the Australian dollar which only started going down since August it makes no sense why fuel is still so high – isn’t it supposed to be a 1 week transition before the price changes occur?

Mitch

sounds similar to interest rates.

WVB

same as banks & interest rates. the same mechanisms are at play here. Oil companies demand profits (as do shareholders)and dont give a flying f**k about their biggest customer – the motorist.

Tom

It’s definitely because of the weakened state of our economy. When the prices shot back up from the high 1.20′s to roughly 1.50 in QLD last week, it co-incided with the very weak Australian dollar.

As i write this we are back up to 72 us cents. As it climbs closer to the 80 it should stabilize at, expect fuel to go down in correlation.

Milar

Here is my take of the factors in the pump price.

1. The cost of the oil
2. The value of the AU dollar
3. The cost of shipping
4. The cost of refinement
5. Market variables (eg competition)

1 is down, 2 is down, 3 is up, 4 is stable. 5 will account for the difference.

Also don’t forget we are tied to the Mogas 95 (petrol not oil price) in Singapore. With a 7 day lag. So market variables in Singapore come into play as well.

http://navelcontemplation.blogspot.com Supercujo

Also when they quote the price of oil on the markets, it is the price of oil future contracts, not the current price. The current price is related to the future contracts that were traded months ago when the price of oil was still quite high.

If the AU$ regains its lost value, over the next few months the price of petrol should steadily fall. If the AU$ doesn’t head back up, expect prices to stay the same.

That said, oil companies do like to lift prices as soon as the futures price goes up and only bring them back down when the price actually hits the market.

But as with any other product, if you don’t want to pay the price they are charging, then don’t buy it. You wouldn’t buy a TV for $5,000 when you are only willing to pay $4,000, would you? Easier said than done, I know, but if demand drops the price will too. Ride a bike, catch a bus or train, walk even. Reduce your reliance on oil and you will be happier.

Frontman

Look what are you all worried about???
The ACCC has looked into this and found that there is NO price gouging going on and MR07 (yes yesteryear man) has a plan to put a website up to stop all this nonsense……..
(Please read with a LARGE dose of sarcasm)

http://dodge Marcos

Their is one simple reason and it has nothing to do with the australian dollar.

Its because their C*NTSSSS….simple..

Thus ends the lesson….

Adstar

The Oil companies are all profit driven & don’t even worry about the consumer. Maybe the ACCC should have a look at this since Fuelwatch is not going to be around anytime soon.

Genie

Its as Reckless1 said, yes oil is now $US78 a barrel, but factor in the value of the Australian dollar against the US, the price is only a little lower than the peak oil prices we had a few months ago.

As for reasons why oil is $US78 a barrel, well we don’t have enough years to live to discuss all the contributing factors.

http://navelcontemplation.blogspot.com Supercujo

You know Marcos, using the the correct word usually helps.

“Its because they’re C*NTSSSS….simple..”

The fuel companies can set their prices however they want, as long as they don’t collude in setting those prices.

Alex II

Australian’s are now use to paying $1.50 + per litre, we’ll probably never see a price near $1 again, no matter what the price of oil is. Why drop the price of your product while customers are still buying.

RoFlmaTiC

Just be thankful that it isn’t worse… Imagine if the Australian dollar had remained high!

Using Reckless1′s figures: $1.70 x 0.97 / 0.66 = $2.50 a litre!!

Though a high exchange rate means I will have more spending money in USA and Canada at the end of the year Silly me not to have changed my money when the rates were higher.

Kinetic

RoFlmaTiC your ^ calculation interests me.

Milar

RoFlmaTiC, your formula is flawed, if the $AU was higher, oil prices would be relatively lower.

Don’t forget, there is a strong relationship between the strength of the $US and the price of oil. As the $US gets stronger, the price of oil decreases and the reverse. Any bounce we see in the $AU we will probably see in the price of oil.

Kinetic

If the Aussie dollar stayed at $US0.97
At $US80 oil @0.66 = $0.68 a litre Australian.

Kinetic

Sorry
* At $US80 oil = $0.824 a litre Australian

Kinetic

I was just so outraged at fuel prices my mind couldn’t focus…

http://faster DanMan

Oh come on cant we talk about politics or religion, you know nice sensible subjects….?

Are multi national companies making a profit were and when they can…. say it ain’t so!

JEYKL & HYDE

if the wankers that supply the oil haven’t yet woke up that they are KILLING their future by simple being too greedy,then they are really doomed.look what happened this year-ethanol cars,electric cars,reliance of public transport,transport strikes.give people enough excuse to change their habits,and they will…and one day soon someone WILL invent an alternate energy source for cars,that costs bugger all…you tube “joe cell” or “tesla”.no wonder the arabs are busy building golf courses and motels.

RoFlmaTiC

Ooops what a rookie error that was! D-:

I had the gist… because I had this same conversation last week, what I SHOULD have said was that we should be thankful that the oil prices have dropped, because if they had remained at the same level then we woulda been paying $2.50 a litre for petrol with the current exchange rate.

FRUGAL_ONE

Oil companies are in business to make profit.

They should be putting the price UP, YOU don’t have to buy from them, no duress being applied.

It’s all the car makers fault, why don’t they get/advance there non fossil fuel programs at a faster rate?

What ever happened to that water-power vehicle [Not that we have heaps of water in Oz!]

Cheers

F-0

Andy

Dont use falling exchange rates as an excuse. We were govering around the US$ 0.69-0.75 for most of the early 2000s yet the price was 99c to 1.30. And that was with oil at $80/barrel. Likewise Diesel.

Ah well, at least we’re taxing their profits back into the system.

Westy

Regardless of futures, exchange rate or whatever the price of petrol will rise just before Christmas holidays….anyone want to take a bet ?

Frontman

Westy, Do the Hollidays start on a Friday or a Tuesday???

Big_End_Bearing

The market will deterimine prices, demand will be high over the break due to people travelling and you will no doubt have a tigthening of supply. I dont believe there is anything sinister about the “sudden” rise in prices during this period.

Genie

Andy, whilst I love a good public linching and would love to join the bandwagon and blame the oil companies, at least try to us facts to justify the linching. The following numbers shows the median price of oil per barrel since 2000, and the inflation adjusted value.

Year Price Todays equivalent price
1998 $11.91 $15.70
1999 $16.56 $21.30
2000 $27.39 $34.16
2001 $23.00 $27.92
2002 $22.81 $27.22
2003 $27.69 $32.34
2004 $37.66 $42.80
2005 $50.04 $54.99
2006 $58.30 $62.11
2007 $64.20 $66.40
2008 (May) $97.98 $98.66

So no, oil wasn’t $80 a barrel in 2000. It was less than half that, which surprisingly is what petrol was selling for in 2000, around $0.70 a L or half what we pay now.

Of course the oil producers are making a profit, they aren’t the Red Cross or the Salvo’s, they are multi-billion dollar countries who contribute up to 70% of the GDP of the middle eastern countries they are based. Why would a country sacrifice there own prosperity to help other wealthy economy’s out. Its the same as if we started selling steel or aluminium at or below cost price, just to help other wealthy western countries out at our own expense, it doesn’t make sense. So why do people get antzy over oil producers doing the same thing? If you don’t want to pay for petrol, get on your pushbike.

Jake02

Aussie Dollar affects petrol prices = bulls**t!

i’m glad this has been brought up. the oil price has been below $100 a barrel since the end of august but petrol prices haven’t gone down. the lowest i’ve seen is $1.28.9 but if you think about it it should be MUCH lower.
i saw that about a month ago (on the STUPID CYCLE THAT SHOULDN’T EVEN BLOODY EXIST) and the lowest since i’ve seen is around $1.35.9. Even in a trip to brisbane two weeks ago the lowest was $1.29.9 – which isn’t that low considering qld petrol is 4c a litre cheaper because of a 4c cut in fuel tax (which also shoudn’t exist).

i hope someone important sees this or someone writes into A Current Affair or TodayTonight and see what happens.

http://faster DanMan

The only reason IMO Oil prices flucuate so much is to keep the average person talking about it… Otherwise if all prices were the same why would you choose BP over Royal dutch shell? etc.
You burn the hydrocarbon’s you pays your money.. stop whingeing for gods sake… Or buy less cr8p you dont need in your life to pay for it… just a though.. maybe consume a little bit less?
There’s a novel idea.. nahh never catch on.

sickofit

To all these “sensible people” say you should “just walk” or “ride a bike”….

Stuff you.

Its not easy to walk/ride 50k per day, to get to work. Public transport isn’t an option (none available). And changing jobs isn’t at all possible (only job available). And neither is moving to another area (sick family). Where i am hydrocarbons is what i need to get anywhere. Hence my outrage at the fuel prices, and at these pretentious d**ks who probably can afford to live in the city, 5 mins wlkk/ride away from work.

http://navelcontemplation.blogspot.com Supercujo

Sickofit: It seems that you are in a bind. Could you move to a more efficient vehicle?

Petrol prices are only going to go up from here.

dazza76

As usual the Oil companys have us Bent Over the Bowser !!

Genie

Sickofit, I think the point is that bitching about fuel prices is just a pointless an endeavour as the suggestion people can walk or ride. I agree with you that for the majority of people driving will be the only practical way to get to work (I’m 60k return trip to work) and changing a job is certainly not an option. But whilst we can all sit around and blame oil companies for screwing us, in the end the problem is so much bigger than that.

Complaining about fuel prices is like bitching about it being dry during a drought. It is one stating the obvious and two achieves nothing. We have a finite resource that we are using more and more of, and yet are continually surprised that it gets more expensive. To those saying its not our currency that has caused petrol prices to stay the same as oil prices drop, I implore you to look at graphs of our dollar over the last two months and the price of oil, and you’ll see they cancel themselves out almost perfectly.

Yes, currently we are almost all totally reliant on petrol to sustain our way of life. Getting a more fuel efficient car or driving less is not a viable option for a lot of people. But last time I checked bitching about fuel prices and throwing blame around did not make fuel any cheaper. That was my point. Yes, its bloody harsh, but thats life. Oil companies could half the cost of oil now, and we could enjoy cheap petrol for a decade or so, like in the 80s and 90s. But eventually supply would not be able to match demand, and we would end up right where we are now, but a hell of a lot worse, with China and India’s populations a decade further westernised. The drive for more fuel efficient cars would diminish during the era of cheap petrol, like they did during the 80′s and 90′s, until in a decades time we would be cursing the car industry again for not supplying fuel efficient cars, because us consumers weren’t demanding them.

People need to forget the prices of fuel during the 80′s and 90′s, because those days are gone. The end game is removing our need for petrol and replacing it with something more sustainable. For that to occur, consumers need to maintain the demand for more fuel efficient cars so that it becomes more profitable long term for industry to spend the required money to research and develop a more sustainable solution. That demand simply won’t be sustained if petrol drops back down to $1/L, the current financial crisis was enough to turn climate change from the being most important issue for Australians to the fifth or sixth, in just two months. The same will happen with fuel efficient cars if petrol got significantly cheaper for any stretch of time.

Rebs76

LOL, and I thought it was only happening here in the EU (Finland, to be precise). At least we are all in the same boat, m8s!!! I think Milar summed it up quite simply to the following factors. Except that I don’t think the cost of the oil should be #1. TAX is #1.

1. The cost of the oil
2. The value of the AU dollar
3. The cost of shipping
4. The cost of refinement
5. Market variables (eg competition)

Falcodore

Where i live fuel is stll $1:55, tell me thats not gouging. Even taking in current market conditions it should be about 20c/l cheaper, what a rort!

Dale

Yeh! No one seems to be keeping the oil giants in check! The govt sure needs to!

Cupid Stunt aka No Name

I read that OPEC were meeting recently to review production of oil. They are going to reduce production now so the price of fule will go up.

I for one will love the day when I can get in my electric car to go the 10K’s to work and use no fuel at all. Stuff OPEC and Exon eh!

Andrew M

Throw some LPG in it then Cupid.

Halve your “Fule” (as you put it ha ha) bill, and wave bye to OPEC

Genie

How did you work that out Falcodore? Lets step through it.

1 oil barrel = $US78 = $AU113.
1 oil barrel = 42 US Gallons
42 US Gallons of crude = around 28 gallons of petroleum

1 US Gallon = 3.78 Litres

$AU113 / (28 x 3.78) = $AU1.06 a litre

None of that includes the cost of processing, shipping, fuel excise and any profit for the distributor and retailer. Fuel excise is I think 30c a litre, then we’ll bung on GST, and then a few percent profit for each link in the chain, and you can see where the next 50c is coming from.

I’m going to stop there before people think I work for the petroleum industry. I don’t, but a little education into why petrol costs as much as it does will go a long way.

Falcodore

The ACCC arejust a bunch of overpaid yesmen who do nothing for the consumer and im not just talking about their lack of action concerning fuel prices/companies. Genie, me and the bloke i work with, who is right into the stock market etc, worked it out roughly. Not sayin im right, but when the price of fuel in the next town down the road (roughly 45 mins away)is 7/8c/l cheaper it makes me think they’re gouging or something considering it used to be the other way around only 8 months ago. Work that out for me please cause i cant.

SamR

I don’t think the oil companies in Australia are screwing us any more then they usually do. (and that is good and normal in a capitalist society)

The reason I think this is that there is SO MUCH MONEY involved. If they were screwing us 10, 20 or more cents a litre (that people here they are) they would be ROLLING in money, tens of Billions extra.

They would not be able to hide it in their accounts it would be pure profits. The ACCC, the Govt and everyone else would be all over them.

http://caradvice anthony fisher

We are to believe we live in the lucky country and im sure at imes we do, however i dont feel so lucky paying all these fat cats their large and undeserved profit margins , i mean where’s the service in service station. And they cry but its this and that , the bottom line IS the bottom line. Soon their may not be much oil for sale and we’ll need alternatives, so look out if you walk or cycle , as im sure someone will come up with a step or pedal tax.

Andrew M

why do you think pedometers were invented Anthony??

http://Jeep John

Not sure why I am replying given some of the really stupid comments of some

Bottom line is drop in $AUD value has haappened in conjunction with drop in oil price and have counter acted each other. While price of oil reached $147 US it only lasted a couple of days and the price that would have impacted was more like ~$140 US. Although we are linked to the Tapas Price (Singapore based).

What is really needed is a transparent calculation which provides an indicative petrol price taking into account $AUD and Tapas price, etc so that oil companies are kept in check. This would be better than Fuelwaste ..err Fuelwatch

eh179driver

For my 2 cents worth, petrol and diesel here in Europe has not come down either. I filled up earlier in the week in Hamburg and it is still EU1.38/litre. I am not sure what the Aussie $/Eu is right now but it will equate to around AU2.25/lite. Diesel is around UU0.08/litre more than petrol depending on the diesel you buy. Last week in the EK petrol was around PS1.25/litre and diesel was around 0.05/litre more. I don’t know of too many ares in Europe where fuel has dropped at all apart from the normal weekly discount cycles.
It seems to me that we have the same problem.
I can’t wait to get back to Australia and buy cheap petrol again!!!

Victor

eh179driver – you just beat me on the whole euro rant!

Point being fuel really is bloody cheap here in relative terms. Go and live outside Australia even briefly and you’ll notice! We really have nothing to complain about here relative to a lot of other countries…

http://caradvice anthony fisher

We all have the right to our own opinion (stupid) or not.
I think that with most of the finacial/economic problems around the world it is simply based on greed, greed, greed and not service, service, service. Tell me why the banks can claim to be DOWN up to 25% projected profits (oh the poor dears) and yet they still rake in tens of millions of dollars in profits. The government get their fare share of the fuel excise (tax 1) and the gst (tax 2) when will this double dip end. The big oil companies seem to make plenty of dollars in profits too. Most of the LARGE fuel on sellers also seem to make a profit, yet when (Mr little)single service station trader who tries to bring service back and lower bowser prices (making adequate margins) he/she is forced out of business for trying to give others a fair go. Unfortunately we now live in such a world (which we are destroying at an alarming rate) where its all about the mighty dollar and greed, greed, greed.

http://www.cescom.com.au erik ceslis

I agree with most of the comments, petrol at the bowser should be about $1.05 or thereabouts. I was checking some of my component prices earlier today and the exchange rate was in Oct 2000 about 0.65c. We were paying about 80 something cents for a litre then when the barrel price for crude was about US$24.

The new federal government is very conspicuous in its absence from this issue when a BIG election promise was to address the spiraling petrol costs!!
Is there any truth in the rumour that Union Super Funds have been invested with our Oil Companies, wouldn’t it be in their interests and of their members to have the price at the bowser as high as possible?

steve cardilini

I am so damn sick of being ripped off at the pump,,oil prices a couple of years ago were around $45 au a barrel ,and the aus dollar was aropund 65 cents,fuel was selling for 70- 80c au a litre,why the hell are we paying $1.20 – $1.30 a litre and more for fuel now,these evil greedy mongrels are trying to duplicate lats years record profits at the expense of the economy,which I am sure more people would have been able to pay their mortgages if they were being held for ransom at the pum,,or maybe we would go out more often,,and have money to spend,,what they are4 doing and getting away with is nothing short of highway robbery,and nothing short of ridiculous,someone should do something,,maybe we blockade all fuel stations so no one but essential services can acces petrol until they bring down the prices..crazy yes,,but if they want to sell fuels they will have to comply,,,what do u think