Record fuel prices

[MAFIA]

Originally Posted by MAFIATL

Tell me Howard how does everything (basic) go up like fuel, food, mortage, bills, rates etc go up but not our weekly WAGES...... Everyone and everything is making money but no extra profit to our weekly pay. This does not make sense and it's p*ssin most average Australian off.

oh really blutura then explain this! ^^^^

I think we should be voting for other party then Labour or Liberal!

[OldManGhia]

At least under Howard and the Libs we aren't paying 17.5% interest on our mortgages, unemployment is at its lowest in years and inflation is lower as well.

The real problem is that the oil companies are the ones that calculate oil prices so there is little to stop them setting what ever price they want. We need an organisation that will publicise the oil prices and how they are calculated on a daily basis and publicly show that oil companies are ripping us off. Then maybe prices will come down. Thats MAYBE with capital letters.

With LPG anyone can look up the contract price and its easy to see why prices go up and down. At the moment prices for LPG should be around Sept 05 prices but in reality are probably 5-6c nmore. LPG prices usually only change about once a month because that is how often the contract price changes, trouble is the oil companies are a month behind in reducing prices but not when it comes to increases, goes up the day after the price changes.

[4.9 EF Futura]

Originally Posted by MAFIATL

Tell me Howard how does everything (basic) go up like fuel, food, mortage, bills, rates etc go up but not our weekly WAGES...... Everyone and everything is making money but no extra profit to our weekly pay. This does not make sense and it's p*ssin most average Australian off.

It's called inflation and its a necessary evil.

Riddle me this.

OK - so prices of *most* things are rising. Let's take the supermarket - makes a perfect example. Now, the people who work at the supermarket most likely shop there as well - agreed?

Let's say the employees are complaining about how the prices of food and groceries are increasing and they need a wage increase to counter this. Management agrees and puts wages up 5%.

Management now sees that labour costs have risen 5%, so they decide that prices on their products need to start increasing - because at the end of the day, they're in it to make a profit, if profits are not being made then they'll fire everyone, close the store and move onto something else.

So they increase the price of their products 5% to combat the increased wage costs. The workers of the supermarket are now back to square 1. They are getting paid 5% more but the prodcuts have increased 5% as well. So they may ask for another payrise - the cycle has begun.

Now take the supermarket example and apply it to the whole economy. People demand payrises to combat increased prices. Prices rise as wage costs are becoming more expensive.

This is exactly what we DONT WANT to happen. Its exactly how you wind up with steep inflation, at which point the RBA cranks interest rates up to the max and sends the economy into recession - i.e. "a recession we have to have"....

The real problem is that the oil companies are the ones that calculate oil prices so there is little to stop them setting what ever price they want.

The market actually sets the price. The more demand there is, the higher the price goes (basic market functions). This continues until certain participants are priced out of the market - i.e. oil goes to the highest bidder. If the global market for oil is willing to pay $75 per barrel, there actually isnt much an oil company can do about it. It operates just like gold, coal, wool etc.

Well, i tell a lie. They can increase the supply, which will have the effect of bringing the price down. But unfortunately almost every oil producing nation is pumping the stuff HAMMER AND TONG, some OPEC nations have maybe 5% extra capcaity up their sleeve - but they need to keep that in reserve for a REALLY rainy day. $75/barrel is nothing more than a slight drizzle.

Wont help prices at the pump much - not enough refineries to process it into petrol. The USA hasnt built a refinery for 30 years now - what does that tell you about their predictions regarding oil supply?

Reason being there are reports that the US is sitting on high density oil shale holding 2 trillion barrels of oil, Canada has some many billions of barrels (as oil shale as well), the Russians have massive amounts of oil (in crude form) as well and the Iraqi refineries are controlled by the US led invasion forces.

Iraqi oil isnt online yet. They are sitting on BIG reserves - but obviously not a good idea for bush (politically) to be sending men in to set up oil wells whilst the country is in the state that it is.

Oil shale in the northwest and canada isnt really oil. There are lots of problems. Basically they heat the out of the shale, it expands and secretes an oil-like substance which goes into one HELL of a refinery and comes out as a petroleum product. Problem a) once you've heated the shale, it expands and therefore the hole you dug it out of isnt big enough to put it all back. Problem b) you consume a LOT of energy heating it. Problem c) that's one VERY VERY fancy refinery you need to work with it. At the end of the day, it might have cost to $30 to produce that barrel of oil... but the saudis are pumping it out of the ground for $2 barrel... a barrel of oil that costs $30 to produce isnt going to help much.

Russia has BIG oil and gas reserves. Unfortuantely its a bugger getting to most of it. And if the oil is expensive to produce then unfortunately it doesnt contribute a lot to the global market.

Or is it all just John Howard's fault? :evilking:

[luke]

Originally Posted by Dodge

jerry can 25 $ and 2 mtr of 16mm tube $ 3.00 , free fuel fridays are looking like making a come back LOL

Originally Posted by LTDHO

Ha ha

I hate the taste though.

Pack of mints not exceeding $2.00 , you're laughing.

:

[charles_wif_xf]

I'm going to try and answer a few of the questions posted by fellow members and clarify some statements made by other members.

Originally Posted by AU98C-Wagon

At least under Howard and the Libs we aren't paying 17.5% interest on our mortgages, unemployment is at its lowest in years and inflation is lower as well.

No matter which government is in power, they have no power to affect interest rates directly. They can only carry on like a toddler chucking a tantrum that they can control interest rates. The RBA is responsibile for interest rate rises and falls (in my view, interest is one evil the world can do without but I'll leave that for another time).

Originally Posted by 4.9 EF Futura

It's called inflation and its a necessary evil.

Riddle me this.

OK - so prices of *most* things are rising. Let's take the supermarket - makes a perfect example. Now, the people who work at the supermarket most likely shop there as well - agreed?

Let's say the employees are complaining about how the prices of food and groceries are increasing and they need a wage increase to counter this. Management agrees and puts wages up 5%.

The explanation behind why the prices have initially gone up is due to the dollar (ours, the US dollar, any fiat based currency) is losing its purchasing power. This is due to the fact that the currency is based on nothing, backed by nothing and only survives due to public faith in the currency.

Originally Posted by 4.9 EF Futura

Oil shale in the northwest and canada isnt really oil. There are lots of problems. Basically they heat the out of the shale, it expands and secretes an oil-like substance which goes into one HELL of a refinery and comes out as a petroleum product. Problem a) once you've heated the shale, it expands and therefore the hole you dug it out of isnt big enough to put it all back. Problem b) you consume a LOT of energy heating it. Problem c) that's one VERY VERY fancy refinery you need to work with it. At the end of the day, it might have cost to $30 to produce that barrel of oil... but the saudis are pumping it out of the ground for $2 barrel... a barrel of oil that costs $30 to produce isnt going to help much.

You are bang on there, but at current prices, the profit margin is still over 100%.

What this so called clever country of ours needs to do is to actively explore out-of-the-box alternative energy technologies, as biofuels would place a massive strain on the Australian ecosystem.

[4.9 EF Futura]

Originally Posted by charles_wif_xf

The explanation behind why the prices have initially gone up is due to the dollar (ours, the US dollar, any fiat based currency) is losing its purchasing power. This is due to the fact that the currency is based on nothing, backed by nothing and only survives due to public faith in the currency.

Agreed Has been some time since we backed a currency with bullion! Altho as far as the face value of money goes - i'm OK with that, as my line of work would offer very little in the way of a bartering system ;)

[charles_wif_xf]

Was the Aussie dollar ever backed by gold? Or was the gold standard dumped when we went decimal?

[4.9 EF Futura]

Originally Posted by charles_wif_xf

Was the Aussie dollar ever backed by gold? Or was the gold standard dumped when we went decimal?

USD was backed by gold and our currency was stapled at a fixed value to the USD

I think all of the major currencies were backed by gold but I dont think the AUD has ever been considered a major currency.

[charles_wif_xf]

Just went out (had to get new mouse) and saw the local servo selling ULP for 121.9. What in the name of Sir Issac H. Newton is going on?

[XplosiveR6]

Originally Posted by 4.9 EF Futura

The market actually sets the price. The more demand there is, the higher the price goes (basic market functions). This continues until certain participants are priced out of the market - i.e. oil goes to the highest bidder. If the global market for oil is willing to pay $75 per barrel, there actually isnt much an oil company can do about it. It operates just like gold, coal, wool etc.

I understand that the market sets the price for oil, simple supply and demand. But, supply and emand could not alone cause the barrel prices to clime so sharp, prices of petrol have risen 80-90%!! in 3-4 years, where before 3-4 years ago petrol prices where increasing, but at a steady, very slow rate.

for example, around 6months ago, prices climed to 130cpl, then a few months later prices where around 108cpl, then about a month or 2 ago prises shot back up to what we have now, these sharp, falls and rises cannot posibly due to the market supply/demand.

Has anyone realised that petrol pricing has gone out of control since 9/11??

[4.9 EF Futura]

Originally Posted by EF_Dave

I understand that the market sets the price for oil, simple supply and demand. But, supply and emand could not alone cause the barrel prices to clime so sharp, prices of petrol have risen 80-90%!! in 3-4 years, where before 3-4 years ago petrol prices where increasing, but at a steady, very slow rate.

Im guessing that 3-4 years ago, you werent getting cold-called from india on behalf of your insurance company or financial institution?

Some scary reading here:

http://www.cbc.ca/news/background/oi...ly_demand.html

Few points to note:

- Oil demand is is expected to increase 54% in between 2000 and 2025. To put that in context for anyone who doesnt want to read the article, to keep up with demand, the oil producing countries of the world will need to pump an additional 44 MILLION BARRELS EACH AND EVERY DAY OF THE YEAR!!! Our current global consumption is about 83 million barrels per day - and producers can only just keep up with that.

Dunno about you but that sends a freezing cold chill up and down my spine.

- China's demand for oil is expected to surpas the USA in 2025. The USA currently goes through 20 million barrels per day. China currently consumes just over 6 million barrels per day.. yet are expected to be getting through more than 20 million a DAY within the next 20 years!!!

That's going from:
1,011,120,000 litres per day to
3,370,400,000 litres per day

Each and every day, 365 days a year... over a period of 20 years or so.

Here is a table from the above article showing the recent growth in consumption. As horrific as the concept may seem - the oil price really does appear to be a result of increased demand.

These figures are in MILLIONS OF BARRELS PER DAY!!

Country 2000 2001 2002 2003 2004
USA 19.70 19.65 19.76 20.03 20.52
China 4.80 4.92 5.16 5.55 6.63
Japan 5.61 5.53 5.46 5.58 5.44
Former Soviet Union 3.90 4.30 4.11 4.18 4.16
Germany 2.77 2.81 2.72 2.68 2.67
India 2.05 2.10 2.10 2.20 2.30
Canada 2.03 2.04 2.08 2.19 2.29
France 2.00 2.05 1.98 2.06 2.04
UK 1.76 1.72 1.77 1.72 1.86
Total World 76.95 78.10 78.44 79.89 82.63

I suggest we enjoy the luxury of fossil fuels whilst we can

[OldManGhia]

The market actually sets the price. The more demand there is, the higher the price goes (basic market functions). This continues until certain participants are priced out of the market - i.e. oil goes to the highest bidder. If the global market for oil is willing to pay $75 per barrel, there actually isnt much an oil company can do about it.

I don't agree because Oil Companies set the price BASED on the market rate. They can then set the price wherever they want it to be. You only have to look at the huge profits these companies are making to realise they are setting the price way above a reasonable profit margin.

Also the exchange rate on the dollar affects the price paid per barrel. I remember a few years ago when oil went close to $60 per barrel and the exchange rate was in the low 40s ULP went up to around 1.10- 1.15 per litre. Oil is at $75 per barrel but the exchange rate is nearly double what it was then. (77c) So why such a big increase now. I think the answer is simple. Oil companies are building up reserves for the day when there is no more oil and they will need to bring out of the closet all of the inventions and improvements in engine design they they have bought up over the years.

I have also heard commentators in the media equate a $1 rise in oil to 1c at the bowser. If thats the case then we should be paying around $1.25 for ULP. 75c + excise of 38.1 plus GST = $1.244

[4.9 EF Futura]

^ see my previous post regarding the increase in demand. Im satisfied that the market is setting the current price. That's a lot of extra 'oil gobblers' coming online in asia.

[XplosiveR6]

Originally Posted by 4.9 EF Futura

Im guessing that 3-4 years ago, you werent getting cold-called from india on behalf of your insurance company or financial institution?

Some scary reading here:

http://www.cbc.ca/news/background/oi...ly_demand.html

Few points to note:

- Oil demand is is expected to increase 54% in between 2000 and 2025. To put that in context for anyone who doesnt want to read the article, to keep up with demand, the oil producing countries of the world will need to pump an additional 44 MILLION BARRELS EACH AND EVERY DAY OF THE YEAR!!! Our current global consumption is about 83 million barrels per day - and producers can only just keep up with that.

Dunno about you but that sends a freezing cold chill up and down my spine.

- China's demand for oil is expected to surpas the USA in 2025. The USA currently goes through 20 million barrels per day. China currently consumes just over 6 million barrels per day.. yet are expected to be getting through more than 20 million a DAY within the next 20 years!!!

That's going from:
1,011,120,000 litres per day to
3,370,400,000 litres per day

Each and every day, 365 days a year... over a period of 20 years or so.

Here is a table from the above article showing the recent growth in consumption. As horrific as the concept may seem - the oil price really does appear to be a result of increased demand.

These figures are in MILLIONS OF BARRELS PER DAY!!

Country 2000 2001 2002 2003 2004
USA 19.70 19.65 19.76 20.03 20.52
China 4.80 4.92 5.16 5.55 6.63
Japan 5.61 5.53 5.46 5.58 5.44
Former Soviet Union 3.90 4.30 4.11 4.18 4.16
Germany 2.77 2.81 2.72 2.68 2.67
India 2.05 2.10 2.10 2.20 2.30
Canada 2.03 2.04 2.08 2.19 2.29
France 2.00 2.05 1.98 2.06 2.04
UK 1.76 1.72 1.77 1.72 1.86
Total World 76.95 78.10 78.44 79.89 82.63

I suggest we enjoy the luxury of fossil fuels whilst we can

i think your definately onto something there,

here are the barrels consumed increased by china form your figures

2001 - 0.12 million
2002 - 0.24 million
2003 - 0.39 million
this is before prices where over $1/l china increasing, but slowly.
Then 2004 coming along...

2004 - 1.08 million barrels increase in petrol consumption in 1 year!!!
i dont even want to look at the increase after 04!

i understand that everyone has the right to petrol, but chinas population is far to big for the world to support

interesting to note though is that many countrys (apart from china) are consuming LESS fuel, this is probably due to the increase of prices

[4.9 EF Futura]

Originally Posted by EF_Dave

2004 - 1.08 million barrels increase in petrol consumption in 1 year!!!
i dont even want to look at the increase after 04!

i understand that everyone has the right to petrol, but chinas population is far to big for the world to support

interesting to note though is that many countrys (apart from china) are consuming LESS fuel, this is probably due to the increase of prices

Pretty scary concept huh? Imagine... thousands of years for each and every drop of the most amazing substance known to mankind to form.

Then we burn it. 80 million 44 gallon drums of the stuff each and every day

[charles_wif_xf]

As I said people, time to get the alternative technologies going!!! Cause China has just become addicted to getting stuck in traffic.

[AWD Chaser]

Dont forget that Nasa plan on putting a permenant station on the moon and hopefully have someone on Mars by 2025. They should no doubt be looking for signs of oil, rather then signs of life nowadays.....

Probably just to exploit another plant of it's natural resources....

[blueoval]

you dont want to know how pee'd off I get when it comes to greed and fuel prices! :jab:

[charles_wif_xf]

Originally Posted by au3 chaser

Dont forget that Nasa plan on putting a permenant station on the moon and hopefully have someone on Mars by 2025. They should no doubt be looking for signs of oil, rather then signs of life nowadays.....

Probably just to exploit another plant of it's natural resources....

At current prices, I reckon they could still turn a profit selling Moon oil!

[OldManGhia]

Originally Posted by 4.9 EF Futura

^ see my previous post regarding the increase in demand. Im satisfied that the market is setting the current price. That's a lot of extra 'oil gobblers' coming online in asia.

Ok, so prices at bowsers that fluctuate up & down depending on the day of the week or whether there is a holiday coming up is caused by the market. So according to this theory then the international price of oil went up because there was an Easter break of two weeks in Australia. I doubt it. When there is a so called discount cycle the price is probably as it should be but goes up at the end of these cycles so they can rip us off.

[charles_wif_xf]

The biggest scam the local petrol companies run is the fact that when a petrol station buys a load of fuel (usually a months worth, correct me if I am wrong) they buy it at one price. There is no need for the price to fluctuate ten times a week. The oil companies take advantage of the fact that either the public doesn't know this fact or they are ignorant of it.