Want Proof the Oil Companies Are Doing Us Over?

Well, the theory goes that it's the price of oil. Rubbish. Hedging and stockpiles and all that dampen the problem. I've seen proof in recent times simply in the fuel prices when sudden surges in world spot price occur.

Take a recent trip to the country. Leaving melbourne 1.239 per litre. Tarcutta (renowned for high fuel prices) later that night 1.209. Canberra 1.229. A small town south of Canberra on the Monaro Highway 1.199.

Seems the message to gouge the customer doesn't get to the country as quick as it does in the city.

A little while ago country people were compalining about how they had to pay up to 10 cents a litre more for their fuel and the oil companies said it was because of the cost of transport to the remote areas. So, on that logic the price in a one building town south of canberra is something like 1.139 (assuming conservative 6 cents per litre transport etc).

We are being raped. The oil companies have no basis for the price gouging they are deploying throughout capital cities. ing_sm

[XA-Coupe]

Of course we are being raped. Ever since we got world parity pricing we have been getting screwed by the oil compainies.
OPEC can make more oil than we can use but increase or decrease the supply to make more money. Despite the fact we get the vast majority of our oil locally we pay the same price as the rest of the world.

[b2tf]

Hold recent are those prices pete? In Wagga Im paying 132.9 for Premium. Not happy.

[LTDHO]

The prices are probably ULP not PULP.

Do we mine our own oil?
Dumb question, but when I stand at the pump I have NFI where it came from?

[Blessed XR8]

I live in Newcastle and was absolutely stumped while in Sydney for Oran Park. Vortex was costing me 1.24 - 1.38 up here but I managed two tanks in Sydney under 1.20. Had to laugh at Diesel being the same price in both cities though.

[Laminge]

Fuel Hedging has been around for ages

Some of the larger companies that spend over $250k pa on fuel are able to hedge their fuel prices, aka all of the larger freight companies

[Pik0]

Originally Posted by XA Coupe

Despite the fact we get the vast majority of our oil locally we pay the same price as the rest of the world.

I was pretty sure Australia didnt have any oil fields..
If not can someone tell me where they are?

[niko]

doesnt aus export oil overseas?

[XA-Coupe]

bass strait and off WA

We make about 80% of our own fuel.

[niko]

and we import 100% of it, ??

anyone know actual figures?

[JC]

Australia does not import 100% of our fuel - we just pay the same for it as if we did.

Interesting article here:
http://www.theage.com.au/articles/20...?from=storylhs

[niko]

why but, why is there global pricing on it, is it because the big players are not aussie owned? and only operated, if thats even the case?

[XA-Coupe]

dollars. They can charge us more. It really is as simple as that.

[Steffo]

Australia

Oil - Production: 537,500 barrels/day

Oil - Consumption: 796,500 barrels/day

Oil - Exports: 523,400 barrels/day

Oil - Imports: 530,800 barrels/day

Oil - Proved Reserves: 3.664 billion barrels

http://www.cia.gov/cia/publications/...k/geos/as.html

Seems pretty stupid.. we produce 537,500 per day, then export 523,400 of them? I don't understand.. why not use it here.. then we can import less.. save money?

[MITCHAY]

Whoah thats a lot of money were talking about especially when oil is at US $70/barrel last time i heard.

[Casper]

Originally Posted by Steffo

Australia

Oil - Production: 537,500 barrels/day

Oil - Consumption: 796,500 barrels/day

Oil - Exports: 523,400 barrels/day

Oil - Imports: 530,800 barrels/day

Oil - Proved Reserves: 3.664 billion barrels

http://www.cia.gov/cia/publications/...k/geos/as.html

Seems pretty stupid.. we produce 537,500 per day, then export 523,400 of them? I don't understand.. why not use it here.. then we can import less.. save money?

Time to go back to school and study world economics Steffo. There is good reason for a lot of this sort of stuff

Like the time we had massive droughts and the wheat crops failed. We imported massive amounts of wheat just so we could export over half of it back out again. Why? Because we had export contracts that had to be filled. If we had said "Sorry, bad year, no wheat" the contrats get cancelled and we lose the next 10 years or so of exports.

Looks stupid on paper but look at the bigger world and economic picture and often there is method in the madness.

That said.... fuel prices are raping us... blame OPEC and China.

[SpoolMan]

If you were pulling oil out of your backyard, you wouldn't sell it for $50 bucks a barrel when the rest of the world is willing to pay $70 a barrel for it, this is why we pay the same price event tho its our own oil from Bass Striat..
The government should cut the tax on tax of the petrol, the GST on top of the excise tax don’t help..
Like Jeff said OPEC can pump more than enough oil for all, but that would mean a price drop and the rich oil sheiks already have more than they can spend but they want more...
i say lets invade Kuwait...lol..

[4.9 EF Futura]

I hope i dont come around as rude - but im pretty sick and tired of hearing all of the theories about how we are getting "raped".

Aussie Pete - that is an interesting analysis, the causes may be many - including price gouging in metropolitan areas. Perhaps the country retailers bought the fuel cheap? I know an independent operator in the adelaide hills who often has this happen. He buys the fuel at $1.10 which means he sells it for $1.15. But its a small town, he doesnt move that much fuel, the delivery might last an entire week selling @ $1.15, in the meantime - a metro fuel station would have had 5, 6 or 7 deliveries with different prices each time which must be passed on to the consumer.

Ah, good old OPEC - perhaps the world's most effective scapegoat. OPEC is operating at near-full capacity - whilst impossible to calculate, the EIA has crunched the numbers and there simply is not enough capacity to meed demand for the year 2005 - of course this is going to result in price inflation. The infrastructure does not exist to instantly double the amount of oil being produced per day - even if it did, there is not enough refineries in the world to turn the damn stuff into petrol.

You cant have a dig at parity pricing either - believe it or not (i doubt anyone will), we are better off with it. Remove parity pricing and provide australians with the opportunity to purchase oil at its production cost here in Australia. Let's pull a number out of the air and say $40/bbl.

Now - do you think the oil companies are going to sell it to us at $40/bbl or sell it offshore, at world market price for, say, $70/bbl? Great, now we get nothing locally (because we refuse to pay global market price to our local suppliers) and import everything.... at global market price... net gain = 0.

It worked without parity pricing when we were a net exporter but those days are gone.

The solution? Legislate the local suppliers to make them sell it to us cheaper? That's ok for the 80% of demand that we can fulfill ourselves. Then we go offshore to fill the remaining 20% - but, hang on, we havent been playing fair have we? We've been keeping all of our oil to ourselves... we would be laughed at.

Hedging may not be as widespread as you think at the moment. Look back (all those weeks ago, lol) when oil was at $60/bbl. Shock and horror all over the world - "that's outrageous". Now - how many people do you think would have locked in the price at $60/bbl? You would have been crazy to lock in the price at a record high. But then, it would have paid off big time seeing as nobody expected it to hit $70. Do you think anyone would hedge a position at $70/bbl? I doubt it, so if there are any further increases I would expect them to be passed on immediately.

Shivvers, we havent even considered the impact of the foreign exchange rate yet. Oil hit $70/bbl on the same day the AUD copped a minor hammering in the FX market - so expect some outrageous fuel prices this weekend.

We have to stop looking for easy answers guys. The situation is incredibly complex and pointing the finger at OPEC, oil companies, world parity pricing does nothing. Our planet is simply struggling to keep up with our demand. And it amuses me that a site based predominanlty on PETROL GUZZLING FALCONS is full of people sitting around going "why is the price so high??? those bastards".

So - who is next on the scapegoat list? India? China?

Originally Posted by 4.9 EF Futura

So - who is next on the scapegoat list? India? China?

China's already been blamed in this thread so that just leaves India.

[Chilliman]

I suggest that you all read up on 'Peak Oil' (Google is your friend) We are almost at the peak of oil production. Is the price of oil higher than it should be - sure is, but that just the enevitable profiteering by the oil companies before production goes into terminal decline and triggers a global economic slowdown. On the positive side the higher artificial prices may serve to slow down demand for oil as people try to use less of it and hence delay the peaking of production.

If you think it's bad now, while there may be an oil price bubble burst in a years time (as some analysts have predicted) dropping prices down to US$40/barrel - the long term outlook is bleak. How's US$150/barrel by 2010 sound or US$350/barrel by 2015!

[Heeno]

Originally Posted by Chilliman

If you think it's bad now, while there may be an oil price bubble burst in a years time (as some analysts have predicted) dropping prices down to US$40/barrel - the long term outlook is bleak. How's US$150/barrel by 2010 sound or US$350/barrel by 2015!

sounds like i'll be brushin the cobwebs off my pushie and riding to work! well they wanted people to start using public transport, they got their wish

[XA-Coupe]

Originally Posted by 4.9 EF Futura

I hope i dont come around as rude - but im pretty sick and tired of hearing all of the theories about how we are getting "raped".

Aussie Pete - that is an interesting analysis, the causes may be many - including price gouging in metropolitan areas. Perhaps the country retailers bought the fuel cheap? I know an independent operator in the adelaide hills who often has this happen. He buys the fuel at $1.10 which means he sells it for $1.15. But its a small town, he doesnt move that much fuel, the delivery might last an entire week selling @ $1.15, in the meantime - a metro fuel station would have had 5, 6 or 7 deliveries with different prices each time which must be passed on to the consumer.

Ah, good old OPEC - perhaps the world's most effective scapegoat. OPEC is operating at near-full capacity - whilst impossible to calculate, the EIA has crunched the numbers and there simply is not enough capacity to meed demand for the year 2005 - of course this is going to result in price inflation. The infrastructure does not exist to instantly double the amount of oil being produced per day - even if it did, there is not enough refineries in the world to turn the damn stuff into petrol.

You cant have a dig at parity pricing either - believe it or not (i doubt anyone will), we are better off with it. Remove parity pricing and provide australians with the opportunity to purchase oil at its production cost here in Australia. Let's pull a number out of the air and say $40/bbl.

Now - do you think the oil companies are going to sell it to us at $40/bbl or sell it offshore, at world market price for, say, $70/bbl? Great, now we get nothing locally (because we refuse to pay global market price to our local suppliers) and import everything.... at global market price... net gain = 0.

It worked without parity pricing when we were a net exporter but those days are gone.

The solution? Legislate the local suppliers to make them sell it to us cheaper? That's ok for the 80% of demand that we can fulfill ourselves. Then we go offshore to fill the remaining 20% - but, hang on, we havent been playing fair have we? We've been keeping all of our oil to ourselves... we would be laughed at.

Hedging may not be as widespread as you think at the moment. Look back (all those weeks ago, lol) when oil was at $60/bbl. Shock and horror all over the world - "that's outrageous". Now - how many people do you think would have locked in the price at $60/bbl? You would have been crazy to lock in the price at a record high. But then, it would have paid off big time seeing as nobody expected it to hit $70. Do you think anyone would hedge a position at $70/bbl? I doubt it, so if there are any further increases I would expect them to be passed on immediately.

Shivvers, we havent even considered the impact of the foreign exchange rate yet. Oil hit $70/bbl on the same day the AUD copped a minor hammering in the FX market - so expect some outrageous fuel prices this weekend.

We have to stop looking for easy answers guys. The situation is incredibly complex and pointing the finger at OPEC, oil companies, world parity pricing does nothing. Our planet is simply struggling to keep up with our demand. And it amuses me that a site based predominanlty on PETROL GUZZLING FALCONS is full of people sitting around going "why is the price so high??? those bastards".

So - who is next on the scapegoat list? India? China?

Wow, you are a petrol company's wet dream.
OPEC do modify the output to drive the price up or down according to their desires. They don't even try to hide the fact. We haven't got petrol from Iraq in years but the current Gulf War drove the price up due to 'instability in the region' Well, instability in the region in only relevant if they are getting their oil from a war zone, whihch they aren't.
World Parity Pricing does gouge us. How can basing our price on the price set by a monopoly help anyone but those that make the dollars. Whilst you are at it, watch world oil prices. When they go up, so does our petrol. When they go down we don't. Until there is a retail price war we are stuck with what we have. If we are meant to have parity with the price of oil, the price of petrol should go down ... but it obviously doesn't.
The price for a barrel of oil when I went through school was $30 USD .. we are now talking $70 USD.. just over double. Now given a bigger market and better refining techniques it's safe to say that it is actually cheaper to produce and the economics of scale does the rest. The price when I left school?? Just hit 20C a litre .. during the tail end of the oil crisis. We are now paying 1.20+ .
I don't believe in conspiracy theories and that stuff, I believe that these companies are in it for the dollars ( of course ) but regardless of popular opinion I am not dumb enough to believe they aren't raping us.

[XR Martin]

If you dont like the cost of petrol you could always move, in Venezuela its 12cents a gallon, thats about 4c a litre.

[Casper]

Originally Posted by XR6 Martin

If you dont like the cost of petrol you could always move, in Venezuela its 12cents a gallon, thats about 4c a litre.

Which is probably what they earn an hour at work anyway.

[Sourbastard]

Originally Posted by Casper

Which is probably what they earn an hour at work anyway.

dont forget to take tax out of that amount.

[Dave_au]

Originally Posted by WeirdEL

China's already been blamed in this thread so that just leaves India.

Both China's and India's rapid industrialisation have impacted on the price of oil, however the number one consumer of oil remains to be the united states.

[Steffo]

Originally Posted by Dave_au

Both China's and India's rapid industrialisation have impacted on the price of oil, however the number one consumer of oil remains to be the united states.

By a huge margain too.. China and India put together use barely half of what the USA does...

[wulos]

Originally Posted by XR6 Martin

If you dont like the cost of petrol you could always move, in Venezuela its 12cents a gallon, thats about 4c a litre.

Need to ask the question why it is so cheap there..... Answer - The oil that comes out of Venezuela is rather rare. Venezuelan crude is a napthalenic rich based crude oil(as opposed to parrafinic) so they trade their crude oil off to other countries for refining into oil products not as profitable using Parrafinic crudes.(Venezuela is one of only 2 known oil fields for that specific type of crude) Basic supply & demand, they have something rare that others want, & will pay hansomely for(in the form of cheaper products better suited to other types of crude).

[M14A-Mclaren]

Fuel is $1.52.9 in NZ for 91 RON.

[RED_EL_XR8]

Originally Posted by M14A-Mclaren

Fuel is $1.52.9 in NZ for 91 RON.

Whoa! it'd be cheaper for you guys to run them on ice cream...