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The Forum > Article Comments > Petrol price pressure > Comments

Petrol price pressure : Comments

By Krystian Seibert, published 18/8/2006

The impact of increasing petrol prices on motorists has become a major political issue.

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This FuelWatch idea is good. Not only will it help motorists get the cheapest fuel going, it will increase competition between outlets.

But it really is such a tiny aspect of the whole price-rise saga.

The bottom line is that we should all accept the eternal rise of fuel prices from this point on and concentrate on doing two things;

1. plan for increased efficiency and less reliance on oil on a personal / family basis, and
2. lobby hard for our governments to get stuck into implementing alternatives (not nuclear) and improved efficiencies.

We must also be very much aware of the changing economic regime, in terms of rising prices of just about everything, rising inflation, rising interest rates and rising unemployment / job insecurity…. and do what we can to protect ourselves against them…. and lobby governments to do the same.

Big changes are afoot. It is well and truly time to start preparing for it, on all levels.
Posted by Ludwig, Friday, 18 August 2006 2:32:38 PM
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Good points as always Ludwig

Here's the link for Victorians at the RACV site for fuel prices:

http://www.racv.com.au/wps/wcm/connect/Internet/Primary/my+car/advice+&+information/fuel/petrol+prices?CACHE=NONE
Posted by Scout, Friday, 18 August 2006 2:51:26 PM
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Providing information can make markets work better, but it can also come at a cost.

The way regulation works in WA is that fuel stations must advise the following day’s prices to Fuelwatch, which posts them on its website. In order to ensure that this information is accurate, fuel stations are not permitted to deviate from that price the following day – if they find that the retailer opposite is selling for 4c a litre less, they must just lose the sales for that day to their competitor (assuming of course, they don’t have a friendly informal chat about tomorrow’s prices with their competitor).

The effect of this has been to reduce competition and kill off the price wars that used to periodically drive prices below cost for short periods at retailers competed for market share. Price volatility has reduced, but average prices are higher. The ACCC found that prices in WA actually rose relative to other states after reguation was introduced. This may be offset by the benefits of less volatile prices (though personally I enjoy shopping for the best deal at the trough of the price cycle), and the opportunity to compare prices on the website, but it’s certainly not an unambiguous gain for consumers.
Posted by Rhian, Friday, 18 August 2006 3:30:43 PM
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Who cares if the best price in Western Australia is $1.32 or $1.42
I drive in Victoria.So I drive to a service station that the RACV has advised is the cheapest in Victoria only to find the price increased at the bowser by 10cents one hour ago.
My Uncle,a millionaire, told his wife to go to Woolies and buy Corn Flakes because they were on special,He died immediately after of a heart attack.
Being a miser is now becoming an Australian tradition.
Housewives no longer patronise the local butcher and now run between Coles,Bi Lo and Woolies in the four wheel drive.This produces what might be called a smart attitude.The difference today is that the meat is one week old and full of ice water to increase the weight.
Oh yes the four wheel drive cost $50,000,and costs a fortune to maintain.
Get Real. The important things in life are still the simple things;a good education and good health,both of these parts of life have been highjacked in the pursuit of greed and miserlyness.
Australia,the land of heroes,used to offer free education for the brightest upto and beyond University, and free health services for the poor.
Today, after decades of being ruled by the Lib-Lab coalition,we now have a society of students and the poor prostituting themselves to pay medical and university fees.
If fuel cost is the most important issue our nine governments have to address, perhaps they should close up eight parliaments and thus save the tax component.The amount of hot gas that comes out of these parliaments could be harvested and used to fuel our four wheel drives.
Posted by BROCK, Friday, 18 August 2006 6:13:02 PM
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This seems to be a silly idea. Petrol prices are the ultimate market forces in action - the fact that prices change during the day is a reflection of supply and demand in real-time.

Just let the market do its thing.
Posted by DJB, Friday, 18 August 2006 9:50:37 PM
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Exactly. Just say NO to government. If you want to collect petrol prices and disseminate them free or for profit, fine. But coercing other people into doing the work for you is just unethical.
Posted by Disputur, Saturday, 19 August 2006 8:30:00 AM
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I think we should be very careful about just letting market forces run the show.

We will get badly caught out if we do that. Alternatives won’t even start to happen in a serious way until the economics make them viable if we just leave to market forces. But alternatives need to be ready well before that point.

There are ways of alleviating a bit of the price rise and smoothing the process. But this only makes sense if governments at the same time work towards the replacement of fossil fuels and the reorganisation of our society that will be necessary with a considerably more expensive energy regime.

As I said in my last post, we need to start preparing on all different levels, and well before market forces force us into it.
Posted by Ludwig, Saturday, 19 August 2006 11:31:07 AM
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Ludwig

Absolutely agree. It has been market forces that created our unsustainable western lifestyle. And this is why we need true vision and leadership from corporations, government, small business and you and I.

A holistic approach is paramount; there is no 'either nuclear or oil' - both are limited. We need urgent investment into long term solutions; while we remain slave to short term profit, simple reliance on market forces won't save us.

The fed gov's LPG offer is short sighted, and, like many people, my small car is old (although fuel efficient) - not worth converting to LPG. These conversions only aid the wealthy, who can afford lpg conversion or new hybrid cars. And again, like nuclear, LPG is another nonrenewable resource.

When are our leaders going to wake up to their myopic, going nowhere ideas?
Posted by Scout, Saturday, 19 August 2006 11:51:45 AM
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We're consistently dragged down by those representing the major contributors to the problems we face, economists and lawyers. Now we have another telling us we should have this price watch, again using ploys to distract us from the real situation. Fossil fuels have two major problems, finite and environmental destruction.

As Ludwig says, this is a tiny part of the energy situation. Its very obvious, the lib/lab junta throughout the country have one aim, retaining control of energy in the hands of the present cartels. Otherwise they'd be throwing money at biodiesel, and associated commercial and economically sustainable alternative products.

Hemp could provide us with oils, paper, cloth, ropes, protein foods, all renewable using no fertilisers. Yet we've a dictatorship whose only aim is keeping control, concentrating on the most destructive and exhaustible aspects of progress. How brain dead's that, maybe all economists and politicians are monotheists. If so it would explain our current direction, destructive fantasy, leading us further into destructive fantasy

Subsidies for LPG, but no subsidies for natural gas, methane, straight vegetable oil conversions. No money for biodiesel, mass butanol or 80% ethanol 20% biodiesel blends for petrol engines. Just throw our money into the oil cartels and associated interests.

Insanity's ruling our world, every things the opposite to what we're told and want. That's insane irrational and totally illogical. Hanging onto failed dreams, is a state of the irresponsible unevolved, not rational evolving beings.

Nothing will change, unless the system and the fools involved are removed. We need to vote the parties out, then demand independents support progressive sustainable life for us all, not just the moronic elite. Let's get real people running this country, not useless, enslaved, programmed cloned drones
Posted by The alchemist, Saturday, 19 August 2006 3:50:04 PM
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look everyone,
now we can all sit and argue about why petrol hasnt gone down, or do we really just want to save money on pertol. well i made the move to scooters, i looked at a site called www.scootersales.com.au
and realised i could save over 60 dollares a week on petrol, it really looks , i recommend you look at this site and find out about all you need to know about scooters,

The angry but now happy scooter rider
Agro (pete)
Posted by agro, Saturday, 19 August 2006 10:04:07 PM
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Scooters are good. But my environmentally friendly vehicle of choice is the old bicycle, which I have ridden avidly for nearly 40 years (well, a series of bikes, not the same old jalopy!). I reduce my fuel consumption by a very large amount by riding 30km to work and return about 50% of the time and could easily increase my savings quite a lot further.

It’s a simple way to make really big savings…. and improve your health and fitness!
Posted by Ludwig, Sunday, 20 August 2006 12:38:28 AM
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Scout .... you forgot one very renewable energy source

POLITICIANS!!

They breed faster than maggots on a dead dog .... (and have no redeeming features or alternative usage)
they are freely collectable in any country .... and
there is always a glut on the market come any election time

But I am afraid - it would be just another brilliant idea of mine poorly thought out, because I clean forgot about the polution they would cause if the politician/air mixture was set incorrectly....

Looks like I am stuck with Ludwig and keep on peddling to and from school with my daughter on my deadly treadly - but I do have to admit that with a knee broken twice and an ankle does not wish to mend completely, all I can say is thank god the journey is only about 20 miles a day .....
AGRO - I did go and have a look at those Bolwell scooters http://www.scoota.com.au/about_bolwell.html .... they really look like the Ducks Nuts - and a nice prices as well!

(Just wondering though if they are tied up with the old Bolwell fibreglass cars of old - anyone know?)
Posted by Kekenidika, Sunday, 20 August 2006 9:55:54 AM
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Increasing petrol prices are hurting me, like most other people, in the short term. However, I actually want petrol prices to keep going up, and dramatically so, because of the medium to long term. There will be a point where oil is simply less economically viable than alternatives, and even the bone-headed politicians won't be able to ignore it or legislate against it. Why prolong the agony?

Obviously, there would be environmental benefits to getting off oil. However, there would be massive economic and political benefits. On the economic side, Australia would benefit massively from producing and selling fuel to nations that couldn't produce enough of their own. On the political side, it would mean that the Middle East would rapidly become irrelevant, and so the constant (and indeed endemic) shenanigans there would be no one's business or fault but its own. The west could quite easily wash its hands of the whole nonsense, and with it the misguided War on Terror, and get back to some semblance of sensibility.
Posted by shorbe, Monday, 21 August 2006 8:47:30 PM
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i agree with agro
scooters are really the only way to beat the rising pertol prices, i looked at that site

www.scootersales.com.au

and found a scooter and am now saving over 65 dollars a week now that i use my scooter instead of my toyota

check it out

The frogman
Posted by frogman, Monday, 21 August 2006 9:36:17 PM
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sorry that was

http://www.scootersales.com.au/

The frogman
Posted by frogman, Monday, 21 August 2006 9:37:46 PM
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“However, I actually want petrol prices to keep going up, and dramatically so…”

Shorbe, I want prices to rise too, but not dramatically so, as that could lead to uncontrolled inflation, price rises in basic commodities, unemployment, etc, and could threaten the coherence of our whole society.

It is very important for prices to rise evenly, and in such a way that it causes us to take maximum action in seeking alternative energy sources, better efficiencies and more frugal practices, but to not push the economic and social parameters too far.

This will be very difficult, especially as prices are most likely to rise in fits and starts. The way it is looking at the moment, there is likely to be a critical price rise spike in the near future that basically tips a large portion of businesses and households over the edge of economic viability. But until it comes, many people are just not going to do very much in the way of preparation.

I reckon governments should progressively increase excise in order to raise prices during times that they appear to be fairly constant, along with maximised effort by way of financial incentives to get people to take up alternatives. Of course the extra revenue would be put directly into measures to wean us off oil.
Posted by Ludwig, Tuesday, 22 August 2006 12:00:26 AM
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Ludwig: You're probably right about requiring even increases in petrol prices to keep the economy under control.

As far as tipping businesses or households over the edge, I tend to think that in a lot of cases such people have probably over-extended themselves due to our current national addiction to consumerism. The increases in petrol over the past few years have been annoying, but I don't drive a car that doubles for an armoured personnel carrier, and I haven't mortgaged some McMansion to within a half of a percent of meltdown. Likewise, I don't have thousands of dollars in credit card debt. Did people think the good times would go on indefinitely? Those who escape from the coming recession/depression (which I think will come regardless of who is in power -- the Libs won't, and shouldn't, do anything to stop rampant consumerism, and I almost suspect the ALP not only can't help but screw the economy, but wants to) largely unscathed won't just be the fabulously rich, they'll be those who were prudent and made provision for the future by living within their means.

As for your last paragraph, the last thing we need is government dipping its grubby paws deeper into our pockets. The extra revenue could, or perhaps even should, be spent on measures to wean us off oil, but it would not. Instead, it would go into either more perks for the politicians, or into bribing the least responsible members of our society (whom it uses as a bludgeon over the middle class). In no way would it actually go towards anything constructive. You could give the money to a five year old or a compulsive gambler and they'd spend it better. I gave up on the "I'd be for more tax if only it were spent right" argument long ago because I realised that fundamentally, no tax will ever be spent right, and that politicians and large sections of society will always see those who actually work hard and are financially responsible as a cash cow.
Posted by shorbe, Tuesday, 22 August 2006 9:24:06 AM
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Shorbe

I agree that a lot of people have probably “over-extended themselves due to our current national addiction to consumerism”, and have thus given themselves very little room to move as fuel and other prices rise. But there are also many people who just battle to make ends meet and who don’t have very much room to move, without being in any way overconsumptive.

There are also many businesses that operate on a small profit margin, or that are prone to crisis if their sales or demand for services decline even a little.

We are so dependent on oil that the rising price cannot help but affect the prices of almost everything else as well as the availability of a lot of stuff….and cause inflation and rising unemployment, etc. Just when people are feeling the pinch directly from increasing fuel prices, those same rising prices are going to be adversely affecting them in a quite a number of other ways. There really is the potential for massive civil upheaval.

So the smoothest transition that we can possibly implement is needed. And this may require governments to steadily raise prices, at times well above the level dictated by the international (uncontrollable) price.

Shorbe I appreciate your concern about the appropriate expenditure of revenue gained in this way, or any tax revenue. I am not quite as cynical as you, although there certainly are problems with how this money is put back into the community. I think that governments will become much more efficient on this whole peak oil issue. The community will demand their best efforts. Anything less will very likely see them turfed out, in times of inevitable rising unemployment and interest rates...even if the opposition can’t offer anything better.

Anyway, the main thing is to keep applying the pressure, and incentives, for everyone to get the hell off oil and onto alternative energy sources (not nuclear) and plan their lives around an energy regime (and a whole economic regime) that is considerably more expensive than at present.
Posted by Ludwig, Tuesday, 22 August 2006 11:01:14 PM
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Ludwig: I'm not so sure the government is best able to handle the problem, or even that it should.
Posted by shorbe, Wednesday, 23 August 2006 3:46:43 PM
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Who would manage it then shorbe?

We sure as hell can’t just leave it to market forces.

I can’t see how we can do it without government control. Afterall, this is exactly the sort of thing that government should be doing, ie – keeping the pressure on us to change our ways, offering incentives and developing a holistic plan.
Posted by Ludwig, Thursday, 24 August 2006 12:42:06 PM
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Ludwig: Well, I guess we'll just have to agree to disagree. Ideologically, I do think this should be left up to individuals/consumers and not government. Practically, governments have been trying to solve all sorts of problems (War on Drugs, War on Poverty, War on Terror) for a long time often with little or no success). I'm not a fan of government, if you couldn't already tell.
Posted by shorbe, Thursday, 24 August 2006 4:50:40 PM
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But shorbe if we leave it up to consumers, we will just suffer all the same sorts of things that have got us into this mess – the tragedy of the commons, whereby people tend to get what they can while they can, and if some choose to reduce consumption or impact due to some ideological stance, it is only them who miss out, for as long as everyone else or a fair portion of the populace continue exploitative practices. And it is a case of the most aggressive and greedy coming to rule the roost.

No – we just cannot leave it up to the individual.

I agree with you that governments are pretty hopeless. But our whole situation would be much more hopeless without them. It is this quality of government that we should be trying to reform, not a bypassing of government.
Posted by Ludwig, Friday, 25 August 2006 1:59:04 PM
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Ludwig: I guess I have more faith in individuals and their abilities to regulate themselves and make long term decisions. Do we consider ourselves to be basically irresponsible? Do we consider the people we know to be irresponsible? Maybe you'll answer yes. If not, then why extrapolate to the position that society as a whole is irresponsible?

I don't think that government is the lesser of two evils. Besides which, and this is one of my fundamental problems with democracy, if we don't consider people to be capable of running their own lives or interacting sensibly via the market, why the hell would we unleash them on the ballot where they can do even more damage? If people (as individuals or in groups) are irresponsible, then the idea of them voting seems to be a compounding of that. It seems like an argument for some sort of totalitarian rule, not democracy.
Posted by shorbe, Monday, 28 August 2006 10:05:12 AM
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This is the essence of the tragedy of the commons scenario shorbe – that people don’t consider themselves to be irresponsible when they are just trying to feed their families or make a profit. Individually they are not really being irresponsible, especially if they are just doing the same as everyone else around them and would lose out if they voluntarily pulled back. Even in our society where everyone knows about unsustainable practices, I think we would be battling to think of people as being that irresponsible for continuing to do the same old thing for as long as everyone around them continues to do it.

And this is exactly why we need a strong centralised system of governance.

It is essential that our government implement financial incentives to get us off oil. It is essential that they fund research and development of alternative fuel sources and more efficient technologies.

Ok, so some forward-thinking institutes, companies and individuals might get into stuff like this, but if governments push it along, it can only help.

You do make a good point about short-sighted self-centred people (irresponsible if you like) voting. Yes governments do largely reflect the will of the people. But, I would argue that whether or not you consider the people to be irresponsible for maintaining unsustainable practices, you most certainly can consider governments irresponsible if they encourage these practices or don’t work hard to reform them.

So again, I don’t think the people can make the necessary changes, such as those necessary in the face of rising fuel prices, without a lot of help from government. And it is very much a case of lobbying governments to get their act together, rather than dismissing them as useless.

I was pleasantly surprised to hear Kim Beazley this morning have some pretty good stuff to say about the urgency of dealing with rising fuel prices. So I think there is hope that even our old dinosaur parties can very quickly move in the right direction…. and will with just a little bit more prodding.
Posted by Ludwig, Monday, 28 August 2006 8:27:12 PM
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Ludwig: Well, I have major problems with a system of strong central governance because it lends itself to massive abuse. Besides which, I don't believe it's the right of anyone to make decisions for another, to prescribe morality in other words. Once you start trying to talk about the public good or utilitarian concepts, at best you'll end up with a country like Singapore, at worst, a country like China, Nazi Germany or the Soviet Union. After all, what's in the public good? The environment? Housing prices? Censorship? National service? Abortion (eg. a one child policy; or conversely, a populate or perish policy)? Sexuality in general? Just where should we draw the line that says government does or doesn't have a right to interfere in a particular area of our lives? An argument can be put forward for any area of our lives that it somehow has wider ramifications for society and our own individual selfishness stops us from seeing that. Ironically, strongly centralised governments tend to be most beholden to conservative ideologies (at least on social issues) and/or those with money as the most important goal.

Also, you're assuming that politicians are somehow like the fabled enlightened despots. They're anything but such things, partly because they're human, partly because they're extremely ambitious and ruthless humans, and partly because centralising power in their hands and allowing blanket policies ignores the thousands or millions of intricate needs of diverse communities and individuals.

No, things may often be a bit of organised chaos in this country, but we'll ultimately sort any problems out that we have simply because we have to in order to survive. Just as the left want government to step in and take control to prevent environmental decay, the right want government to step in and stop moral decay from single mothers, sexually explicit television, etc. Yet it's because our culture has traditionally had less government involvement that we've avoided the problems endemic to regions that have had very strong government, and the extreme swings (often with much bloodshed) that are part and parcel of such systems.
Posted by shorbe, Tuesday, 29 August 2006 5:15:51 PM
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