Even in QLD, Australia’s cheapest state when it comes to fuel, prices are nearing the $1.40/L mark. When I first came to Australia in 1993, Fuel was around $0.60/L. In about 13 years, fuel has more than doubled in price. Mainly thanks to the fact that our Fuel Prices are linked to the Singapore Fuel market. This seems to be because the Asian fuel market is far more volatile and hence it gives the fuel companies more reason to increase prices. So at $1.40/L where is all that money going to? Sure the sheiks in Saudi Arabia are driving Ferraris, BMWs and Audis made out of silver but they can’t be taking in all that $1.40! So who is taking your money? After some research this is what I found :
Singapore International Price : ~$0.73
Federal Fuel Excise : ~$0.38
Industry local component : ~$0.11
GST : ~$0.13
Petrol Stations : ~$0.05
Total : $1.40
So what does that all mean? Lets go through them one by one:
Singapore International Price : This is the price that Fuel enters Australia. Although the majority of our fuel doesn’t actually come from the Middle East, since 1977 The Australian Government has decided to match the price of fuel in Australia with international markets. The Singapore international fuel market was picked due to its proximity to Australia and also because its the largest of its kind in the region. The reason the government has decided to match the fuel prices with International Markets is to stop oil companies in Australia finding better deals overseas and leaving us without fuel.
Federal Excise : Peter Costello, thats all I am going to say!
Industry Local Component : This seems to be where the wholesaling and handling costs are factored in.
GST : as if the 38 cents of Fuel Excise a liter that the government is taking from us wasn’t enough, there is another 10% tax on top! How completely ridiculous as the government is taxing a tax!
Petrol Stations : You can now officially feel sorry for the petrol stations. As the first point of contact for motorists, these guys seem to get all the blame and not much of the money.
The Australian government receives around 14 billion dollars a year from Fuel Excise. Thats $14,000,000,000 extra that we pay, each year to fund John Howard’s over seas trips and Peter Costello’s ego. Admittedly it is much lower than the average 84 cents a litre of Fuel Excise that the Organisation for Economic Co-operation and Development (OECD) countries (30 of them) pay, nonetheless it makes you think! Of course the other things that affect the Fuel prices in Australia include the Price of the Australian Dollar, as well as what the Fuel industry likes to call the Fuel Cycles.
Ever noticed how fuel is cheaper some days of the week and more expensive other days? Most people use to put this down to the fact that most Public workers get paid on Thursdays so it would make sense to have the fuel cheaper on thursday. Well, that might be a small factor here in Australia but given that Fuel is no longer cheap on Thursday’s it is obvious that other factors come into play. This patterned hike in Fuel prices is linked to the Fuel Cycle of the Singapore International Fuel Market and it seems to change bi-annually or so. Prices can differ as much as 20 cents from the low end of the cycle to the high end.
Well there you have it! Next time you are filling up the tank, spare a thought for the petrol station getting that lousy $3 out of your $60 fuel bill. No wonder they are stacked with snacks and magazines! And make sure you curse John Howard and Peter Costello for stealing your money.