We can benefit from high fuel prices
Posted by clubwah on June 4, 2008
I was watching the American news services on Sky News yesterday and was surprised at the impact of rising fuel prices in America. Although Americans are still paying around $1 a litre, there has been a large shift to public transport in big cities and many people are struggling to make ends meet with a family and two large SUVs to feed.
High fuel prices could change the way Americans address their motoring needs. While the rest of the world has largely downsized their cars, the Americans refuse to give up their Yank tanks and SUVs, which, like guns, they see as some God-given right.
Of course a similar thing is happening in Australia. And while petrol prices are high, the overreaction by Opposition Leader Brendan Nelson on how tough people are finding it to fill the family car is nothing more than populist politics that will achieve nothing.
People are doing it tougher because of high petrol prices, but paying more means they are most are simply readjusting priorities, rather than going under. It’s funny how we have a financial system which seeks to reduce inflation by raising interest rates to reduce spending on consumer goods, yet everyone reckons the world is about to end just because petrol prices are having the same effect.
Of course the high price of fuel is causing consumer goods to go up in price, which is why the Government should forget about reducing the price of petrol to encourage more economically friendly driving habits, transport options and hopefully alternative fuels – it should also forget about imposing a Greenhouse tax on fuel while the price is at record highs to spare drivers serious pain. It should however reduce the excise on diesel to reduce road and rail transport costs and encourage the uptake of diesel cars, which use less fuel and are less polluting, until more suitable alternative fuels are developed.
What do you think?
Bron said
What do you think?
I think petrol is too expensive. The politicians should do something about it!!!
ar said
Demand for fuel is fairly inelastic. People only buy it because they need to use it. There may be some pleasure driving that people can cut down on, but it is likely to be a small part of their weekly travel. If your business requires you to use fuel, it is unlikely you will be able to cut down much at all. People looking for a new car might go for a four cylinder one if they can, but most people are stuck with the car they’ve got.
At 20,000km per year, say at 10l/100km, an average car uses 2000 litres. At $1.50 per litre that = $3000 per year. At $2.00 a litre that’s $4000 – an extra $1000 per year. A pain in the arse sure, but not enough to make me split with $35 for a weekly bus ticket.
Chade said
I think Nelson’s convinced me that I’m not going to be able to buy my $75,000,000,000 Tarago due to the “rich tax” and fuel at pomg $5/litre, and it’s all Rudd’s fault. In fact, we should have never voted the Liberals out.
…Yep.
Dave from Albury said
Another thing which should be done immediately is withdraw the import duty discount on four wheel drives, originally designed to assist industry and primary producers but now simply giving a tax break to Toorak Tractor owners, and replace it with a rebate for the people the discount is supposed to actually help. This adds another disincentive to the purchase inappropriate vehicles for urban settings.
Bron said
Anything — ANYTHING! — to stop suburban mums with 4WDs from blocking the streets when dropping off and picking up their kids at school.
Bloody annoying fuckers.
raydixon said
I think my comment went into your spam box Wah. I was having a problem with that everywhere earlier today. Would you un-mark it for me please?
ar said
If you think 4WDs are going to sit idle in the multi-car garages of McMansions around Australia, you’re deluding yourself with a greenie’s wet dream. The only people who will really hurt from fuel prices are… Working Families! These are the people who will queue to save a few cents a litre. At least big forehead Nelson will ease their pain by 5 stinking cents.
Dave from Albury said
I think that if you make 4WDs have to compete with cars on sticker price they will be less popular, right now they have a price advantage which is inappropriate in the current market. Everyone loves to hate on the big 4WDs like the Patrol and Land Cruiser, but the impact of thousands of Rav4’s and the like compared to hatch backs or wagons is also significant.
will from florida said
I watch the news and wonder, while the talk is about the cost of crude oil, the weak dollar and fear cuasing problems – I think many people are out of touch with the reality of everyday life.
Gas prices are higher due to greed. Greed from opec, oil companies, speculators, business owners and so forth. yes, I believe things will get better – why, becuase the greedy will burn this sector out and move to the next new money making thing……
Win a $500 Gas Card
raydixon said
No, the greedy oil companies will bring the price down when demand drops … but only marginally. Overall though, petrol prices will continue to climb and we’ve just gotta get smarter about fuel use, as Wah suggests.
John Surname said
I regret voting out the Libs, because if Nelson was PM now, everything would be so much different.
Taralgon would have a post office.
Petrol would be cheaper.
His staff wouldn’t be working hard at all!
JR said
One thing, the price of diesel makes no sense from the point that it comes out of the processing tower before petrol, making it a by-product of petrol. Must be the excise I guess.
DHH said
The factors rising the price of fuel is speculation by the major market investors, over-demand (by the new high population economies of China and India) and that cartel known as OPEC.
Yes the desire to drive thirsty SUVs should be looked at but this rediculous price list is because of the three demons above.
Any excuse to drive up prices benefits certain groups and so the ‘threat of bombing Iran by Israil’ caused an 11 dollar rise in the stock exchange yesterday.
The fact that China and India have a growing middle class now driving cars and expanding energy hungry industry was a factor ignored and now slaps us back in our faces.
The OPEC cartel plays games with all of us using prices as a threat and means to individual member’s plans.
An intersting factor whe should know about how much the impact of rising oil prices have in a big producer like Kuwait. For every 1 dollar US the price goes up the GDP of Kuwait rises by 1.3 per cent…… lucky them…..
Yes, lets all be a bit more green, a bit more frugal but first cut out the cancer before we apply preventative medicines.
DHH
Marrakech
….