You can bet that, today, fuel economy will feature more heavily in car buyers’ minds than at any time in the past 32 months. It’s been about that long since the last serious oil shock, which saw global petrol prices Australia peak at $US147 a barrel, back in July 2008. Everyone remembers that time, if not the precise date – but for the record Australian petrol peaked on July 10, 2008, at a national average of $1.67 a litre.
You can bet Abdalla Salem El-Baldri remembers that time, too. The OPEC general secretary at the time, it’s a safe bet that Mr El-Baldri has very fond memories of mid-2008. Happy days, for some.
Petrol is not that far off its previous record today, with prices in Sydney ranging from the early $1.40s upwards.
Then there’s the ‘maybe’ carbon tax on fuel – simple fact is, that if fuel is subject to the carbon tax, every $20 per tonne levied by Prime Minister Bob Brown and his executive assistant, Julia Gillard (at least that’s how it appears to be playing out in practise) will add another 4.5 cents per litre tax to petrol. That’s an effective increase in the tax on petrol of something like 10 per cent.
You can bet there will be massive pressure from the Greens to up the ante higher than $20, too. Check out what’s happening in British Columbia right now. BC has had a Carbon tax since 2008. It’s currently $20 a tonne, but powerful green groups are lobbying hard for an increase to $200/tonne by 2020.
Macroeconomic forces – global supply and demand, basically – with demand outstripping supply are what’s basically forcing prices up. If the Aussie dollar weren’t on parity with the Greenback, we’d already be looking at much higher fuel prices. For example if the $AUD was hovering in a more conventional $US0.85 ballpark, petrol prices here would already be back at July 2008 levels.
Libya’s recent psychotic break and Nato’s intervention hasn’t helped, either. Nor has the increased perceived threat to Saudi Arabia, which I’d like to see changed to the world’s most broccoli-rich nation, instead of the place with most of the oil.
The car industry has made impressive efficiency gains in the past decade. We get many more kWs and many more kms out of every tank these days. You can bet that the ‘green’ marketing in car advertising and at motor shows will feature fuel efficiency increasingly as a direct hip-pocket benefit as petrol prices continue to soar. It means car advertising might segue across and soon be less about ‘green altruism’ (saving the planet), and more about conserving one’s own filthy lucre…
Still, it’s always seemed to me that spending $30,000 or more on a new car is a ridiculous way to start saving money. With apologies to the marketing budgets of the 50-something car companies fielding fuel efficient messages to the public. Thirty grand – hell, let’s work on a changeover price of $20,000 – buys about 14,000 litres of petrol, even at today’s prices. That’s enough to drive about 140,000km in an average Aussie car. And that’s the amount of fuel you have to save before you break even on the deal, not the amount you have to burn.
So, let’s say you ditch a really thirsty car that returns you 20 litres for every 100km you drive. Let’s say you replace it with a super-efficient car that returns six litres per hundred. You’ll save 14 litres for every 100km you drive. You’ll need to drive 100,000km before you get to the break-even point…
This basically means it’s economically irrational to buy a new car just to save money on fuel. However, when it comes time to upgrade to a new car for other reasons, fuel efficiency might be a rather large factor in your assessment of what to buy – especially if prices keep heading north.
If you want to save fuel, there’s a lot simpler and more immediate way of doing it than by buying a new car. You just need to drive differently – by acknowledging that the accelerator in your car is basically connected to a tap that empties the fuel tank, with negative knock-on effects to your wallet.
Basically you need to remember: just don’t open the tap quite as hard when the lights go green. Although it is fun to accelerate hard, it’s also a profligate waste of fuel/energy. Ditto when the lights go red or the traffic stops up ahead. Close the tap early by lifting off the gas and save money by coasting – while everyone around you is still burning. In traffic that’s flowing, just keep up a nice, constant, go-with-the-flow speed. Don’t jockey for advantage like some Type A driver with rabies.
And forget all that hokum about removing your roof racks or taking the golf bag out of the boot or turning the air conditioning off (or turning the engine off at red lights) – everyone touting that guff has no concept of practical versus theory, nor of meaningful savings versus negligible ones.
To illustrate this point, TV reporter Dave Eccleston and I did a little experiment recently, with two identical cars, driven on identical roads at identical times, filled right to the brim at the start and the end. We did a 130km round trip from central Sydney to Penrith on the western fringe, and back. He drove (legally) like the Type A/rabies driver; I took it easy, pretending that I had Miss Daisy in the back.
A couple of points about this story: we got polar extremes as a result of me driving for peak economy, and Mr Eccleston being pushy in traffic to the extent permitted by law. The difference meant his driving style consumed 50 per cent more fuel than mine – which is a roundabout, and more impressive, way of saying that if you’re a reasonably assertive driver you could save 33 per cent by giving your driving style an extreme makeover. In the real world, maybe you’re not so aggressive, and maybe you don’t want to drive quite so passively as I did for this experiment. It’s still easy to cut your consumption by, say, 15 per cent – which is like rolling back the cost of petrol to about $1.20 a litre in today’s market. Better than a shopper docket…and it would also more than offset any price hike flowing from the Gillard Government’s ‘maybe’ carbon tax. Even so, what’s the bet nobody in Canberra even knows that a public education campaign to this effect about driving style would have a more positive effect on fuel consumption that this proposed ridiculous tax?
You know, if we all just drove a bit more efficiently, we’d cut the nation’s fuel consumption by 4.5 billion litres annually – which would reduce our complete, utter economic dependency on foreign oil, the euphemism for which is ‘energy security’ – a term you’ll be hearing a great deal more about in the coming decade. And we could all start doing it, like, right now.
If you’re still unimpressed with the cost of petrol, you might have to drive a little bit less. It seems like stating the bleeding obvious, but you save 100 per cent of the fuel you would have used on trips you don’t make. Many people could reduce the distance they drive just by getting a little more efficient in their logistics – achieving more things in each trip rather than making a bunch of short trips each to a single objective. Also on the cards for some (but not all) workers is the option to work from home at least some of the time, cutting the commute (tolls and parking as well as just fuel). Or staggering start/finish times to get out of the congestion.
Still offside about the price of petrol? You’re probably just unreasonable, or one of those people who likes to be outraged, possibly about anything convenient. (Asylum seekers? Shock jocks? Tabloid TV? Discount eggs?) Because I’ve formed the view that even if petrol costs $2 a litre it’s still very cheap stuff.
Here’s the acid test: let’s say you live 5km from Woolies. The round trip to the shops in your car will take 10-15 minutes at 60km/h in air-conditioned comfort. (Not including the actual shopping, which takes forever. Especially if you’re a man.) In the average Aussie car such a trip to the shops and back would cost $2 – that’s if petrol is $2 a litre. The alternative, if you believe that’s an excessive price to pay, is to dust off the builder’s barrow, hoof it there and trundle the groceries back. (Scratch that: you’ll need to run back if you don’t want the ice cream to melt…) The barrow option will save you $2, and it could be a real plus for the national obesity epidemic, too – if it catches on – but I think many people would choose to be outraged and still drive.