Prime Minister John Howard and Treasurer Peter Costello today confirmed the obvious as they both agreed that fuel prices are not coming down anytime soon. Petrol prices in Australia have hit record highs amid a fabricated spike in crude oil prices.
“At the moment there is no comfort on the petrol price front, particularly given the chaotic situation in the Middle East and the conflict that is going on there,” Mr Howard said.
Unfortunately for Mr Howard, he should realize that our Fuel Prices don’t need to be linked to the middle east since we don’t actually get much of our fuel from there in the first place. If you’re interested, I wrote an article a while ago explaining fuel prices.
“I can promise all Australians that we are all the time looking at trying to help at the margin, but it’s very difficult because we can’t ignore the brutal laws of economic arithmetic.”Mr Howard said.
Mr Howard said there was no simple way to cut the price of petrol, given the high price of crude oil and other factors pushing up demand.
“There is the possibility of cutting excise, but to cut excise by a meaningful amount, which would be about ten cents a litre, would cost almost $3 billion. And there are many people in Australia who would argue very strongly that if the Government has got $3 billion it should use it in some other way.“ Mr Howard said.
The government continues to state that there is nothing it can do to lower the fuel prices while we continue to to buy oil on international markets. Perhaps the option of reversing the 1977 decision by the Australian Government to match the price of fuel in Australia with international markets would be a good idea?
“The price of oil is around $US75 a barrel and these are all-time records. I can’t see the price coming back in the near term, I would not want to see them go to $250 a barrel, and I wouldn’t expect that. But I can’t see any relief on the world oil price in the future.”
“The Government cannot do anything about the world price of oil. Australia is a net oil importer. That means we take the world price like every other country and the world price is now at all-time records. You feel that at the bowser. That is not good for anybody. It’s not good for consumers, it’s not good for the economy, it’s not good for the Government.”
“But whilst you are buying your oil on international markets, you’ve got to pay world price. A government doesn’t control that price. ” Mr Howard Said
At this rate, the price of petrol is going to hit $2 by this time next year, however one will hope that greed on the part of oil companies will subside just a little bit as more and more people turn away from fuel and look into other options. What other options you ask? Well, God forbid, a bicycle can be a useful tool sometimes!