Enough to Make you Cry

[Mack 6]

Since my company deals with various companies in the middle east, my boss went over there last week.
2 Days ago I recieved this message.

"Bloody Hell petrol is expensive here in Oman, twice the price of Qatar. The bastards are ripping me off at 28c per litre! I couldn't even get $18 in the tank."

I think I'm moving to Qatar.

I'm just wondering how these prices are feasable (apart from the fact they produce a tin of oil)

[EA2BA]

$18 more like $81 it cost me the other day :(

[DivHunter]

it's about 10c/L in Iraq

[XR Martin]

Originally Posted by Fairmont99

it's about 10c/L in Iraq

If its not blown up before you get it.

[4.9 EF Futura]

Originally Posted by Mack 6

I'm just wondering how these prices are feasable (apart from the fact they produce a tin of oil)

The government subisidises the price of petrol at the pump. It's therefore feasable for the suppliers of the petrol because its basically state funded.

They say that cocaine is god's way of telling you that you have too much money. Providing subsidies like that is probably telling a government the same thing.

Shame about the majority of the population who live in poverty....

[charles_wif_xf]

Go to Venezuela, they have capped prices on petrol at US5cpl.

[4.9 EF Futura]

Oh and an ironic twist....

Because of the low price, consumption is massive and waste is plentiful. Couple this with the constraints on refining capacities... and you'll find that a lot of these countries end up IMPORTING petrol... despite sitting atop the largest proven reserves in the world. Also get big problems of shortages and smugglers buying and taking to countries where prices are mich higher.

As SBS says... the world is an amazing place

[Aeron]

Would we be better off with capped fuel prices??

[4.9 EF Futura]

Originally Posted by Aeron

Would we be better off with capped fuel prices??

Define better off lol.

Increase in demand would mean we'd have to figure out a way to supply more.

Oh - and cancel medicare, centrelink, any other form of government spending. And figure out a way to generate the kind of revenues that arabic royal families make from their texas tea....

So if we're willing to figure all that out then yes - we could have some cheap *** petrol. Unfortunately the country would be ruins... apart from the few who control the money...

[charles_wif_xf]

All the government has to do is knock off the GST on petrol and there is an instant 10-12 cpl drop (assuming the petrol companies don't bump their prices in place of the GST). They can keep the stinky excise, just get rid of the tax on the tax.

[AC]

GST has little to do with petrol prices, The Gov takes 45% in taxes anyway.

3 Big things they will never stop taxing to the Hilt.

Petrol, Booze and Smokes.

Look at the shell website. -->CLICKY<--

[charles_wif_xf]

At current prices, GST amounts to about 12-13cpl

[AC]

Well if the Gov stuck true to the 10% on everything speach before GST came in.

In reality we'd only be paying about 80-90c P/Ltr

[Bucknaked]

How does their income's and quality of life compare to here. Whats the average wage over there? Compare it to the average wage here. Maybe they are on par with what we pay

[4.9 EF Futura]

Average monthyl wage in qatar is apparently $795 USD. Based on a standard 48 hour work week.

Min wage for Oman about $260 USD per month, similar hours...

Saudi arabia - $400 USD per month min wage. I think almost everyone works for the government there

Meanwhile the rich families live in ABSOLUTE luxury. Here in australia we distibute a LOT of wealth to the poorer 20% of the population....

Data from US department of state....

Re: Removing the GST on petrol - look up what is referred to as a substitution effect. GST revenue is dependent on the volume of goods and services being purchased. Aside from this, the fact remains that tax isnt the cause of high petrol prices. High petrol prices are the cause of high petrol prices.

[charles_wif_xf]

2ndOwner, you are confusing the Howard government rhetoric with the stuff John Hewson was saying in the early 90's. He proposed a flat 15% GST on everything, whilst at the same time getting rid of every other form of tax and excise (PAYE as it was known then, grog, smokes, fuel excise). If you remember back when he was at servo's pumping fuel for the cameras at Hewson GST prices prior to the election he lost, even back then there was a big difference in price.

[4.9 EF Futura]

Originally Posted by charles_wif_xf

2ndOwner, you are confusing the Howard government rhetoric with the stuff John Hewson was saying in the early 90's. He proposed a flat 15% GST on everything, whilst at the same time getting rid of every other form of tax and excise (PAYE as it was known then, grog, smokes, fuel excise). If you remember back when he was at servo's pumping fuel for the cameras at Hewson GST prices prior to the election he lost, even back then there was a big difference in price.

Many of the taxes GST was desgined to replace were state based and have not been removed to date. The commonwealth does not have jurisdiction to tell a state when and how to remove certain excises and duties.

[charles_wif_xf]

Petrol is one commodity which isn't affected by the substitution effect. People won't rush out and buy more fuel simply because the price has dropped by 10cpl and thus place a greater demand on the available supply. For those who aren't aware of what the substitution effect is here is one definition:

http://www.cr1.dircon.co.uk/TB/1/Incomesubstitution.htm

[charles_wif_xf]

You are referring to the Howard version of the GST, 4.9. The Hewson GST was a very different creature.

[LethalLeigh]

Damn this thread turned into an economic debate real quick! I for one won't be moving to Qatar or somewhere similar so I can run a big block without breaking the bank, the punishment for smuggling alcohol into the arab states is far too high to risk. I know what I prefer!

[4.9 EF Futura]

Originally Posted by charles_wif_xf

Petrol is one commodity which isn't affected by the substitution effect. People won't rush out and buy more fuel simply because the price has dropped by 10cpl and thus place a greater demand on the available supply. For those who aren't aware of what the substitution effect is here is one definition:

http://www.cr1.dircon.co.uk/TB/1/Incomesubstitution.htm

Great point. The substitution effect is of course impacted by the elasticity of demand for a product - be it a commodity, luxury item or otherwise. However, id suggest that based on the MASSIVE increases we have seen in the price of a litre of petrol over the last few years (im sure everyone remembers gasping as we saw it hit $1 back then lol), the elasticity of the product is tested.

Im not sure about you but a 40% increase in the price at the pump has certainly had an effect on my demand for petrol... of course there is a certain "threshold" of demand - i.e. the fuel i need to go to work and down to the shops - i'll always "need" $x. But look at the "excess" component of many people's petrol consumption. I know for sure that I no longer throw $30 of petrol in the falcon on a friday night and go for a romp in the country - lol, $30 aint enough for a decent spin, i'm looking more at $40 now. That $10 has to come from somewhere.

If im on a tight week (i.e. big swamp of bills, unexepcted healthcare payment or something) then im working on a set amount of $$$. If the fuel i need for a week costs $10 more, that's $10 that has to come from somewhere. Chances are - that extra $10 spent on fuel will now not be spent on another product which would more-than-likely have attracted GST....

Could i possibly be suggesting that petrol is crossing the line from a commodity and approaching luxury status??? Well - as far as going for a drive in the country is concerned - yes.

EDIT: Oh, i realise this isnt a textbook application of the substitutiuon effect on the GOODS. It is the substitution effect on the GST... altho it is essentially the "flip side" of the definition applied in the above link....

[Mack 6]

Originally Posted by LethalLeigh

Damn this thread turned into an economic debate real quick!

Tell me about it. I just wanted to express how much of a bastard my boss is because he refused to pay for excess baggage in the form of fuel jerries for me.

[charles_wif_xf]

Sorry bout that Mack 6