Comments on: Has the PM done everything possible on petrol prices? Not likely http://www.crikey.com.au/2008/05/27/has-the-pm-done-everything-possible-on-petrol-prices-not-likely/ now with extra source Tue, 24 Nov 2009 19:34:24 +1100 http://wordpress.org/?v=2.8.6 hourly 1 By: Damien http://www.crikey.com.au/2008/05/27/has-the-pm-done-everything-possible-on-petrol-prices-not-likely/#comment-10778 Damien Thu, 01 Jan 1970 10:00:00 +0000 #comment-10778 This article touches on a topic that has always mystified me. People talk often about this "international partity pricing", as if it would be so easy for Australians to enjoy $5 a barrel oil while the rest of the world suffers. I am puzzled about who actually owns this $5 a barrel oil. And why would they wish to sell oil to Aussies at $5 a barrel when they can get $120 a barrel on the international market. How does this work economically? I once met a banker from Brunei who told me that banks in Brunei were the best in the world, because they lent money to citizens at 3%, but paid them interest of 6% on their deposits. I was puzzled about how they worked this magic, and he explained that it was simply a government subsidy. So, with the international oil market sitting at $120 a barrel, who is going to step up and offer subsidied oil at $5 a barrel? Who would be paying for this subsidy? The taxpayer? The tooth fairy? Evil capitalists? I don't get it. This article touches on a topic that has always mystified me. People talk often about this “international partity pricing”, as if it would be so easy for Australians to enjoy $5 a barrel oil while the rest of the world suffers.
I am puzzled about who actually owns this $5 a barrel oil. And why would they wish to sell oil to Aussies at $5 a barrel when they can get $120 a barrel on the international market. How does this work economically?
I once met a banker from Brunei who told me that banks in Brunei were the best in the world, because they lent money to citizens at 3%, but paid them interest of 6% on their deposits. I was puzzled about how they worked this magic, and he explained that it was simply a government subsidy.
So, with the international oil market sitting at $120 a barrel, who is going to step up and offer subsidied oil at $5 a barrel? Who would be paying for this subsidy? The taxpayer? The tooth fairy? Evil capitalists?
I don’t get it.

]]>