While most drivers continue to complain about the rising cost of petrol, diesel and gas, id like to clarify the facts. Petrol is cheap - seriously cheap. Think about it.
15 years ago, petrol was around 60 cents a litre. Now, after all that time we are only paying $1 extra a litre, in much more fuel efficient cars.
To back up what im saying, Tim Colebatch in The Age makes some interesting claims about cost of living increases over the past year, and points out the following:
"...speculators and stockpilers have driven oil prices above $US140 a barrel, 10 times what it cost a decade ago, and nearly three times what it was in January last year.
Yesterday, according to the RACV, the average price in Melbourne was 163.1 cents a litre, 26% more than a year ago, with most of that increase taking place in the past three months."
What he doesn't go on to explain however is the simple calculation which should be made. If a barrel of oil costs 10 times more than it did 10 years ago, shouldn't it naturally follow that petrol should cost 10 times more than it did 10 years ago?
Maybe my logic is wrong, but there isn't any more in a barrel of oil now than there was then.
Therefore - and please please correct me if I'm wrong - petrol should be around $8 a litre, based on a price of 80 cents a litre 10 years ago.
I know that's a simple calculation, and there are other factors to take into account. But based on the increase in the price of a barrel of oil, petrol certainly shouldn't be as cheap as $1.60 a litre.
Even Colebatch's other claim deserves scrutiny, in that the price of petrol has increased 26% a litre in the past year, while the cost of a barrel of oil has in fact tripled in around the same time frame. So a tripling in the price of oil but only a 26% increase at the bowser?
So while people keep complaining that they cant take their family to Torquay for the weekend because it costs too much to fill up the 4WD, keep in mind that Australia's petrol prices are amongst the cheapest in the western world. And based on historical prices of a barrel of oil, actually very cheap.
You know its true.
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About Just Grumpy
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I noticed 95 eurograde petrol was €1.43 a litre (that makes AUS $2.42) yesterday. I nearly went and filled up because that's actually €0.04 cheaper than it was a month/6 weeks ago. I think you've got it good!
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