Economy

Aug 28, 2015

If oil prices are tumbling, why is petrol so damn expensive?

Remember when petrol was under $1 a litre? If oil prices are continuing to drop, why have does it cost so much to fill up these days? Economist and freelance journalist Jason Murphy explains.

Remember summer? Long, balmy evenings, sand and surf, that feeling of thong rubber between your toes. And petrol prices dropping below $1 a litre. It was glorious. But, oh! So brief. No sooner had you blinked than you were back in the office, it was raining, and filling up cost $1.40 a litre. What happened? Every day we hear more about the global oil market taking an express elevator to the basement.

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4 comments

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4 thoughts on “If oil prices are tumbling, why is petrol so damn expensive?

  1. David Irving (no relation)

    I can remember when petrol was 40c a gallon (so ~ 10c a litre).

    However, I’m not concerned about the current price – it’s probably too cheap, in fact.

  2. mikeb

    When the OS wholesale price rises it is reflected next day at the bowsers. When the price falls it takes quite some time before petrol price falls. Explain that anomaly.

  3. Norman Hanscombe

    David, you’re spot on but that’s NOT something people want to hear or discuss.

  4. AR

    Loath as I am to recall the Frazer years, he did commission a study by NERDS in the late 70s which showed that producing ethanol from various feedstocks – with the proviso that it not compared to petroleum -showed approx 70 cents per litre using sugar cane.
    And NO advantage scaled up from approx 500,000 litre brews – ideal for any small town -but, beholden as all torys are to the big ar$e end of town it was buried.
    At least we ain’t in Euroland where it is about 2-3 times what we pay per litre.

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