Petrol price increases

[Hinny]

Oil companies owning petrol stations really have nothing to do with it.

The simple fact is that there are more people in this world who want to buy oil than there is oil being produced. This means that oil has become more valuable, and naturally the oil producers are able to ask a higher price for it.

If we don't want to pay the asking price for oil, the rest of world will.

When oil was $89 a barrel in 1979 the price at the pump for petrol was about 33cents per litre.
When oil recently reached the same per barrel price I paid nearly 6 times the 1979 litre price for petrol. Closer to the oil refinery than Auckland.

[swbarnett]

Its actually cheaper for me to come to work by train...102k door to office, $17/day. Gas for bike - about $17, plus all the usual running expenses. Train takes the same travel time, unless I'm really lucky with the traffic,- about 1hr 45 each way, plus I can sleep, read, etc.

Indeed. Trains are among the most efficient forms of transport. Buses on the other hand are a totally different matter.

Taking the bike is more conducive to a satisfied mind and body, however!

I hear this! Been stuck in the car this past week. Not good in Auckland traffic (even during the school holidays).

[Forest]

When oil was $89 a barrel in 1979 the price at the pump for petrol was about 33cents per litre.
When oil recently reached the same per barrel price I paid nearly 6 times the 1979 litre price for petrol. Closer to the oil refinery than Auckland.

The oil price never got to $89 a barrel in 1979. The highest it got was $39.50 a barrel which (correcting for inflation) was the all-time highest real price until March 3, 2008.

Don't forget also that in 1979 the value of the NZD was still being set by the government, and was actually worth more than the USD. My historical charts show the 1979 exchange rate was roughly 1 NZD = 1.1 USD

[swbarnett]

Last I heard (and remember I'm in the transportation game) is that 100% is going into the roading budget.

Happy to bow to someone in the know. I was referring to a news article I saw a few years ago.

[Hinny]

The oil price never got to $89 a barrel in 1979. The highest it got was $39.50 a barrel which (correcting for inflation) was the all-time highest real price until March 3, 2008.

Don't forget also that in 1979 the value of the NZD was still being set by the government, and was actually worth more than the USD. My historical charts show the 1979 exchange rate was roughly 1 NZD = 1.1 USD

The price that Bill Birch signed us up for was $89 a barrel. The spot market price at that time was $30 a barrel - the highest it had been.
It may well have reached $39 a barrel by year end.

[Forest]

The price that Bill Birch signed us up for was $89 a barrel. The spot market price at that time was $30 a barrel - the highest it had been.
It may well have reached $39 a barrel by year end.

I don't know of these contracts, but I find it hard to believe that we would pay three times the asking price for a globally traded commodity. Oil is a fungible commodity - you can buy it from anywhere and the quality is basically the same.

There are roughly 159 litres in a standard oil barrel (42 US gallons). So at the 1979 price of $30 a barrel you would have a crude oil cost of 18.8 cents (NZD) per litre. Add refining costs, transportation, retail margins, and 33 cents sounds about right for the petrol price.

Today oil costs around $115 USD a barrel or $0.92 NZD per litre of crude. For back of the envelope estimation purposes, we can apply the same 1979 markup of 75.5% which would indicate that we should be paying around $1.61 NZD per litre. However we now have to pay GST and other taxes which would easily account for the $0.40 difference.

[xwhatsit]

I dont think bikes are that much cheaper. For me, anyhow, it is cheaper to run my wifes hyundai 1.3 hatchback than my zx9r. Cost me $120 the other week to go to Hamilton and back.

That's a litre sportsbike you goose -- the hatchback only has 400 more cubic centimetres! Plus, I bet the hatchback doesn't produce 140hp at 11,000rpm, does it?

Normal bikes are a hell of a lot cheaper. I sometimes see 32km/L (~75mpg).

If petrol prices really do shoot off into the ionosphere, hopefully that'll encourage the bike manufacturers to start producing some nice big air-cooled thumpers we can all lap up. The world needs more GB500s in times like these. It's unfortunate that over the years, despite technology advancing, things seem to go backwards -- my CB250RS did 26hp, 80mpg and 150kph when brand new. The new CBF250 weighs more, has 21hp, gets 135kph, and does about 65mpg. You'll notice the sort of mileage figures the old British twins and big singles used to get as well.

[VasalineWarrior]

FOREST: you can buy it from anywhere and the quality is basically the same.


No, it isnt. Its physical and chemical properties vary a huge degree. Ever wondered why we dont use NZ produced oil like wer're pumping at the moment from the tui oilfield to make petrol? Wrong chemical components. Sure, I guess you could but it would solidify in your gas tank overnight. Its more valuble to sell to petrochemical plants to make things like shoe wax out of.

[Hinny]

I don't know of these contracts, but I find it hard to believe that we would pay three times the asking price for a globally traded commodity. Oil is a fungible commodity - you can buy it from anywhere and the quality is basically the same.

The explanation of why he signed contracts for around three times the spot market price was something like...

"We had to pay a premium for long term contracts"

and

" I'm not going to put the future of New Zealand on the vagaries of the spot market"

This was referred to as the second oil shock. The first being when OPEC trebled the price of oil overnight (1975?) and gas at the pump went from 50c a gallon (11c a litre) to One dollar a gallon (22c a litre)

[Hinny]

It's unfortunate that over the years, despite technology advancing, things seem to go backwards -- my CB250RS did 26hp, 80mpg and 150kph when brand new. The new CBF250 weighs more, has 21hp, gets 135kph, and does about 65mpg. .

My Yamaha 250 would run over the ton and used a ton of gas doing it. Low 20mpg.
My Suzuki 380 was faster and seemed thirstier.
Honda 1100 gets down to 10.3kms / litre.
Maybe I need to change my riding style,

[awayatc]

Most of the cheap oil is gone....there is plenty still left worldwide....But the exploration costs are very high.
The price will keep going up and up untill it becomes economically viable to come up with alternatives....

There is a lot involved in getting oil out off the ground, refine it etc.
Yet a litre of Mineral water will cost the same or even more.....?
And what about a liter of milk?

Supply and demand....real simple

[Bonez]

The world needs more GB500s in times like these.

Royel Enfeild should make a killing . Set up your own bio deisol plant and you're away.

[homer]

My Yamaha 250 would run over the ton and used a ton of gas doing it. Low 20mpg.
My Suzuki 380 was faster and seemed thirstier.
Honda 1100 gets down to 10.3kms / litre.
Maybe I need to change my riding style,

I would guess
my faimont does better than your 1100

[davereid]

Today oil costs around $115 USD a barrel or $0.92 NZD per litre of crude. For back of the envelope estimation purposes, we can apply the same 1979 markup of 75.5% which would indicate that we should be paying around $1.61 NZD per litre. However we now have to pay GST and other taxes which would easily account for the $0.40 difference.

Government collects $.42.5c in excise tax as well as GST - from todays Dominion Post, so you are spot on !

[davereid]

Normal bikes are a hell of a lot cheaper. I sometimes see 32km/L (~75mpg).

If petrol prices really do shoot off into the ionosphere, hopefully that'll encourage the bike manufacturers to start producing some nice big air-cooled thumpers we can all lap up. The world needs more GB500s in times like these. It's unfortunate that over the years, despite technology advancing, things seem to go backwards -- my CB250RS did 26hp, 80mpg and 150kph when brand new. The new CBF250 weighs more, has 21hp, gets 135kph, and does about 65mpg. You'll notice the sort of mileage figures the old British twins and big singles used to get as well.

Yeah, I had a CB360 twin in the 70's. If treated with care it got 75mpg. But lots of current larger bikes get up there too. I haven't actually measured my ER6F, but it has to be doing 60mpg or better. Its very very frugal.

Stop press, just googled it and http://www.spritmonitor.de/en/detail/184810.html says 4.47 l/100km ie 65 mpg.