I’m sick of all the whinging about petrol prices
Really, who cares?
1. How much petrol do people actually use, anyway? People whinge and bitch and moan about petrol going up a few cents, and queue up for ages to try to buy petrol at the low point of the weekly price cycle – and for what? A tank will hold less than 100 litres. Typically around 50, but let’s say it’s 100 litres. That means that a price difference of 1 cent is worth a whole $1.00. A price difference of 5 cents is a measly $5.00, less than the price of a cheap bought lunch. For the average driver, they’ll buy 100 litres once or maybe twice per week.
Who gives a damn?
If $1.00 or even $5.00 makes such a difference to someone’s budget then they’re in serious financial trouble anyway – so much trouble that they shouldn’t even think about having a car, because they can’t afford it.
Here’s a novel thought: they could drive less, make their kids walk to school, catch public transport, ride a bike, walk to the milkbar rather than drive, make sandwiches to take to work/school, and so on. They could also buy less of the worthless crap they buy (like biscuits and cakes and bottles of coke and other rubbish). There are thousands of things people could do so that they don’t have to give a damn about a few cents per litre.
Even better, if people reduce demand enough, they can seriously hurt the speculator bastards who have driven oil prices up so much in recent months….at least a quarter of the current price per barrel of oil is due to commodity speculators driving the price up. Hit the bastards where it hurts, drop demand so much that they lose serious money. If the price of petrol bothers you, don’t whinge, get revenge.
Actually, I’m entirely unconvinced that the general public actually care all that much about petrol prices anyway. It looks and feels much more like an astro-turfing campaign by the oil companies and petrol distributors – especially the recent crap about reducing the excise by 5c/litre, anyone can see that if the government does that the petrol companies will, within weeks, increase prices so that THEY get the 5c/litre rather than the government, resulting in yet another transfer of wealth from the public purse to private corporations. Same for all the bullshit about the fuel price watch program – it’s obvious that the opposition to that comes directly from the petrol companies who don’t want buyers to have good information to base their purchasing decisions on.
It’s also a useful distraction and pretend-debate for the government and the opposition – they can rant and rave and score points over a trivial, bullshit non-issue like this, and nobody will notice that nothing of any real substance or worth ever gets debated in parliament…and the media are either colluding in this or are too stupid to avoid getting sucked in.
2. We have the fourth-cheapest petrol in the world. So all this moaning is not about petrol being more expensive than it should be, it’s about not being quite as unreasonably privileged as we were in the past.
3. Oil prices are *inevitably* going up, they’re *never* coming back down. Get used to it, it’s only going to get worse from here – much worse. Instead of endlessly whining about the inevitable, focus on alternatives – like *DEMANDING* that the government start paying more than just empty tokenistic lip-service to the idea of alternative/renewable energy sources.
4. IMO, the sooner petrol hits $5.00 per litre or more, the better. By then we’ll really have to have functional alternative energy sources in place. Because if we don’t, we’re completely screwed.
May 31st, 2008 at 8:07 am
James Purser comments on my post, and i reply to clarify a few points.
May 31st, 2008 at 4:41 pm
Where does your food come from? What sort of substance is used in the creation of farm land, the sowing of crops, the management of the farm’s resources.
What is used to harvest the food? What is used to then transport the food to local redistribution areas and then to the stores and restuarants were you get it?
What about the clothes you wear, the bicycle your ride? What sort of things are used in the creation of that?
What you don’t seem to understand, and most other people actually do, is that it’s a drain on the entire economy. Not just you driving your or other people driving their cars to work and schools.
At each level in the economy gasoline and other oil-based products are used to do any sorts of things. When they say “oil-based economy” they are not blowing smoke.
It’s the same thing with taxes. The government may say they put a tax on gasoline (for example) but in fact it’s a food tax, a textile tax, a travel tax, a electrical tax, and any other type of consumer object or form of commerce. It’s taxing everything. They know what they are doing, of course, it’s just a lot easier politically to make gasoline more expensive then forcing people to write a check for a extra 2 or 3 hundred bucks at the end of the year.
Same thing for ‘corporate taxes’. It’s a tax on your paycheck, its a tax on the food you eat, and the goods you purchase. No corporation has ever paid any tax. Not one, not a single corporation. (when looked at nationally, when looked at globally the effect of corporate taxation has even larger negative effect due to the effects of country vs country competition (hint: outsourcing)). Every single corporate tax ever invention is simply accepted as a increased cost of doing business, which is then passed to the consumer. In fact it’s nearly impossible to put a effective tax on business. The end user, the individual is the one that pays for _everything_. Always has, always will.
The people in government know this, economists know this, but it’s not something that is widely talked about by politicians because it’s a nice way to fool the people into thinking that they are going to ‘get back’ at the ‘greedy corporations’. (the level of greed in a corporation is utterly irrelevant. The people who ultimately pay for taxes (regular folks) are the ones that absorb the costs irregardless of the morality of a particular business.) It doesn’t matter if the money is sent to the government out of your checking account, or is extracted as part of the cost of producing the stuff you use, the effect is the same. It’s considered too ‘complex’ of a subject to really talk about, but in fact it’s not very difficult to understand. It’s one of the reasons why the U.S. government has such low approval ratings. Most people can tell when they are getting lied to, even when they can’t really ‘get’ entirely what is going on.
In this way the increased cost of oil is a world-wide taxation tactic created by the OPEC. The increased price has a very pronounced inflationary effect on the economy in general. At all levels.
So while you see it in prices on the gas pump, it is actually lowering the value of your paycheck by making the majority of the goods and services you consume just that much more expensive. What you may pay personally to some gas station is just a portion of the money that you are spending on increased oil prices.
As far as ‘oil companies’ go, they make more profit as the gasoline prices increase. But that’s the same for any form of taxation. If a t-shirt costs 20 dollars and the corporation makes 5% profit they will make 1 dollar profit. If you raise taxes on corporations and increased the cost of the t-shirt to 25 dollars then they will still make their 5% profit (the 25 dollar shirt will be the price after it’s been cost adjusted) and end up getting 1.25. Have the government tax the oil companies then the same thing will happen.. they can’t loose because consumers will be forced to absorb the costs no matter what happens. This is because there is no competitiveness in this sort of approach. The taxes apply equally to all corporations so all the corporations simply adjust the prices the same. They make the same amount of money (if not more), and the people pay more taxes without realizing it. Rich people get more money, the government gets more money, everybody else has to work harder and waste more of their lives to compensate for the end result of inflation.
“”4. IMO, the sooner petrol hits $5.00 per litre or more, the better. By then we’ll really have to have functional alternative energy sources in place. Because if we don’t, we’re completely screwed.”"
It’s the economy, silly. (J/K)
As the cost of oil goes up then the competitiveness of alternative energy increases also. The reason why things like nuclear power and solar energy are not more widely used is because oil is such a fantastic (in terms of energy potential) and dirt cheap source of energy. In a barrel of oil you have, in effect, a thousand years of condensed nuclear energy storage. (sunlight on plants) That’s a _lot_ of energy. Very convenient form factor… you just have to dig holes to get it and put it in a container.
Oil == bottled sunshine.
So for alternative energy sources to succeed commercially (which is the only way it is really ever going to work out) then one of two things must happen:
1. The technology increases to the point were it’s cheaper to use alternative energy to then to get oil.
2. The price of oil increases to the point were it’s cheaper to use alternative energy sources.
And, you know what? BOTH are happening. :-)
What the government can probably do at this point is to try to figure out a way to help make corporations that are interested in investing in alternative energy more profitable on a quicker time table. This may be something as simple as getting out of their way and reducing red tape or decreasing personal liability for business failure in some way.
Trying to artificially increase the pace of progress by increasing the cost of oil, I feel, will probably have much to much of a negative impact on the economy. Leading to far-ranging negative things like more expensive food, job loss, social strife and all that happy horseshit that comes along with a damaged economic structure.
Thats the difference between a positive, proactive approach vs a negative, punitive one.
May 31st, 2008 at 4:54 pm
Nate, re: food & clothing & transport costs – you’re stating the obvious. Who doesn’t know that increases in the price of fuel will have flow-on effects?
re: your comments on “the economy” – it may surprise you to know that there are more ways to think about the economy than to merely regurgitate american libertarian religious beliefs about taxation.
re: what the government can do? the obvious thing is to tax the hell out of fossil fuels and use the proceeds to subsidise development AND distribution of renewable energy. we can’t afford the luxury of ‘externalisation’ of costs such as pollution (both greenhouse gas and toxic emissions) any more. that would be a truly positive, pro-active approach.
May 31st, 2008 at 6:36 pm
I couldn’t believe what I was reading until I adjusted my brain a little and realised that you are talking about the US. Here in the UK we’re getting close to the $5/litre point (1.25 gbp / litre = 2.473 usd as of last night, and it’s rising rapidly). About 2/3 of the price is tax (1/3 being upfront petrol tax, the remainder having 17.5% duty on it).
The problem is, sticking huge taxation on oil won’t help unless the second bit you identify, “use the proceeds to subsidise development AND distribution of renewable energy”, is chained together. We’re further along the taxed-to-hell road than you folks and I’d strongly suggest thinking about how that link could be preserved, because our government has squeezed out of it.
Thanks also to Nate for a very interesting read.
May 31st, 2008 at 6:37 pm
Oh yes, amusing to see the average tank size being 100 litres over there – nearer 30-40 here :)
May 31st, 2008 at 7:09 pm
Jon, can you read?
“A tank will hold less than 100 litres. Typically around 50, but let’s say it’s 100 litres.”
i used 100 litres as an example to make the maths simple enough for the kinds of morons who whinge about a few cents per litre.
May 31st, 2008 at 7:17 pm
also, Jon, i’m talking about Australia. because that’s where i live. indicated by the ‘.au’ on the end my blog’s domain name.
Anyway, it should have been obvious i wasn’t talking about America – Yanks find metric too hard to understand, and wouldn’t be writing about litres.
and yes, there’s little point in just increasing taxes (although that alone would reduce demand), the real benefit would come from using the proceeds to develop the technologies and build the infrastructure for alternative energy generation and distribution.
(and, of course, if it’s built with public funds, it should stay in public ownership – and not just be another gift to the government’s corporate masters).
June 1st, 2008 at 8:40 am
I don’t normally like to comment on blog posts like this, however I feel I have to in this case. Even if we ignore the ‘flow through’ effects on food, clothing and other goods mentioned above, you still cannot ignore the ‘few pennies’ increase in petrol prices. Yes, today it has only gone up by 1 cent, totally 30 cents on an average tank. However, add that on the the 3 cents increase yesterday, the 5 cents last week, and the 50 cents from the month before, and it soon adds up to fairly substantial amounts.
Since 2000, the cost of filling my tank has gone up over 3.5 times, whereas my paycheck definitely hasn’t. I don’t care where you are from, or what your political leaning is, that’s a lot of money, and has a significant mental and actual effect on other spending habits. An extra dollar on petrol means one less dollar to spend on something else, redirecting money out of the economy.
Also, your comment, ‘Yanks find metric too hard to understand…’ is mis-informed and grossly offensive. What you could have said is, ‘the American populous does not use the metric system, rather they use U.S. customary units (imperial units), and would be more likely to refer to gallons rather than litres’. Despite what you may think, Americans CAN count to 100. The American Scientific community uses SI units, and national and international trade is carried out using the metric system.
June 1st, 2008 at 9:08 am
Ropetin: the point you are missing is that prices have gone up because we’re well past Peak Oil. Oil is getting scarcer and thus more expensive – exacerbated by speculators and other vultures looking to get rich while they can.
This isn’t going to change. This is not something we have any choice about. Prices are never going to go back down. In fact, it’s only going to get worse as oil gets scarcer. Whether we like it or not.
Deal with it. Face reality. We can no longer pretend that oil – and the cheap energy it gives us – is in unlimited supply.
Whinging won’t help.
The only thing that will help is understanding the situation we are in (and, worse, the situation we WILL be in if we ignore it), and start developing the technology and infrastructure needed to keep our global civilisation going.
Whinging about petrol prices not only doesn’t help, it actively harms us – it gives governments an excuse to do nothing real while they have pretend debates about a few cents per litre…the modern equivalent of fiddling while Rome burns.
June 3rd, 2008 at 9:01 am
For those who do not understand why gasoline is too cheap for our own good even now in most countries, it might help you to watch a presentation by Steve Koonin, chief scientist of British Pertoleum, at UC Berkeley a few months ago ().
The main message I got was that alternative energy will never catch on until they are economically viable. One way or another, we will reach a point when, e.g. driving electric car is much cheaper than driving a gasoline-powered car. The government can help ease the transition by artificially making gasoline more expensive now (and save the surplus for some public good), rather than later when pure facts of economics will force that to happen anyways (and environment has been irreparably damaged, with no funds in reserve to help repair it).
June 12th, 2008 at 3:27 am
[...] why I don’t miss the hat much? I must remember to drink more in summer without it, though. I share Criag Sanders’s scepticism about the protests and Chrisitan Perrier’s enthusiasm for bike-pools. I don’t agree with many of Russel Coker’s views [...]
June 29th, 2008 at 10:50 am
The so-called “debate” about rising petrol prices is astonishingly infantile.
Petrol prices in Australia are by far the lowest or among the lowest in the industrialised world.
Supply and demand drives (pun unintended) petrol prices. Supply is increasingly constrained and demand is growing. There’s only one way for petrol prices to go, and that’s up.
It is in fact a very, very good thing that petrol prices are rising. Higher prices will help prevent humankind from destroying the planet. Higher prices will help discourage humankind from committing suicide.
Instead of whinging and whining about petrol prices we should be focussing on identifying and developing transport options that are less damaging to the environment and more sustainable long term. Because if we don’t we are heading toward the extinction of our species. Which will be good news for the planet and for all non-human life on it. Whales will be happy. Tigers will be delighted to see us go.
The Government does not have a magic wand to magically cause prices to fall and supply to increase. Any Government action to control petrol prices will inevitable mean correspondingly higher costs in other areas, eg healthcare.
And by the way, the Government has no money of its own. All the money available to the Government comes from taxpayers. I thought people understood that. Apparently not. We seem to want to invest our own money in our own destruction. How stupid is that?!
March 7th, 2009 at 6:48 pm
Yo Craig!
Well I stubled across this a bit after the fact but feel like sticking my 2c in anyway..
Funny that petrol prices sunk like a stone approximately about the same time as the USA elections.. but have edged up a bit since then. Part of that was maybe the speculation bubble bursting but who knows.. but yes in the big picture petrol prices weren’t a huge % of my spend.. when I was driving to work.
But anyway it encouraged me to get an electric vehicle (a cheap ebay ebike) and I think the general lifestyle change of cycling (with electric assist for when its stinking hot or help up that last steep hill) has helped me anyway. Saying “nyer nyer” to the petrol companies just a minor side benefit.
One area where the petrol prices have had an impact has been Asia.. rice prices have doubled, this has had a real effect in areas where unlike Australia fuel and staple (rice) prices can take up a large percentage of someones income.