Header Ad Module

Collapse

Announcement

Collapse
No announcement yet.

Why is petrol $1.62.9 litre?

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • Why is petrol $1.62.9 litre?

    Can someone explain in simple terms why we are paying $2.13 litre for petrol?
    I'm under the impression that the supply of oil is unchanged - there's no shortage.
    I'm under the impression that the demand for oil is unchanged - we're still using it at the same rate as last year.

    Obviously, something is going on but I haven't heard anyone come up with a clear explanation.
    8
    $1-90
    0.00%
    0
    $1-80
    0.00%
    0
    $1-70
    0.00%
    0
    $1-60
    12.50%
    1
    $1-40
    50.00%
    4
    $1-30
    12.50%
    1
    $1-20
    12.50%
    1
    $1-10
    12.50%
    1
    $1-00
    0.00%
    0
    Less than $1-00
    0.00%
    0

  • #2
    Well one fact is:

    Every decade we use as much oil as we used in the total history of oil production previously. Our exponential increase in demand is unbelievable
    .

    Comment


    • #3
      there are over a million new cars on indian roads this year alone, (not counting china!) simple maths. supply and demand, it wont last forever....buy a horse!

      Comment


      • #4
        While Dean is certainly correct in regards to the exponentially increasing demand for oil (China uses 35 times more oil than they did 8 years ago), as I understand it demand = supply in current international oil markets.

        From what I have read, recent oil price rises are driven by speculation. They're certainly not helped by some guy at OPEC who just last week predicted oil at $170 per barrel by Xmas.

        The NZ Govt collects 50 cents in fixed taxes as well as GST for every litre of oil. So they certainly don't help either.

        M
        Comments may not be relevant to individual circumstances. Before making any investment, financial or taxation decision you should consult a professional adviser.

        Comment


        • #5
          11 incontrovertible truths of oil production and peak oil arguments
          by PeakEngineer

          At NASA, we frequently have to step back and retreat to the last recognizable common ground on technical issues. If we hope to expand the dialogue about Peak Oil, we must do the same. Below are what I consider uncontroversial, solid facts related to energy and oil production. While several of these statements may appear ridiculously obvious to those who are in any way familiar with oil production, we must begin the discussion at the least common denominator -- the bare facts on which everyone can agree. If you are unfamiliar with the basic arguments of Peak Oil, I encourage you to explore these resources.

          Please provide feedback on whether you agree or disagree with this list and we'll see if starting from common ground will allow a wider audience to collectively develop more meaningful ideas about Peak Oil mitigation.

          1. Oil must be found before it can be produced.

          No commodity can be exploited if its existence is unknown. No oil can enter production if it is undiscovered. An absence of discovery therefore yields a future absence of production.

          2. Oil must be produced before it can be used.

          No commodity is useful if it is not brought to a useful state. Oil reserves are useless if they are not transformed into a usable product. Oil reserves are therefore of no use until they are brought to the surface, refined, and moved to the point of desired use.

          3. On the scale of the lifetime of our current civilization, oil is a finite resource.

          Any energy source is finite given the appropriate amount of time. The sun will eventually exhaust its nuclear fuel, but over the course of a human lifetime (or even the human species' lifetime) solar energy will not be depleted. Oil production will peak within the lifetime of our current civilization. There is no position in the debate (including abiotic oil proponents) which disagrees with this point. Oil is renewable on the scale of the Earth's lifetime, but our species would likely be extinct before oil reserves can be replenished.

          4. If demand for oil is higher than the available supply of oil, not everyone who desires to use oil will have the option.

          A fundamental economic principle: when demand exceeds supply, a shortage exists. Some who want to use oil will not have the option. The usual moderator for this situation is an increase in price.

          5. Petroleum products have the highest energy density of any portable energy storage medium.

          There are no known alternatives that match the energy density of products derived from fossil fuels.

          6. The current economy would suffer if the cost of energy increased by a large percentage.

          There are no suggestions that increases in energy costs improve the quality of the economy. There are major disagreements on the effects of high energy costs on the economy.

          7. In a closed system, growth of any kind must eventually stop.

          This is a founding principle of any scientific study, be it physics, chemistry, biology, or economics. If we take the earth as a closed system, then all growth must, at the very least, reach a maximum at some point: oil production, wealth, population, and so forth. Our choices determine when and how growth stops.

          8. All known alternative energy sources currently have higher initial investment requirements than does oil.

          Solar energy, wind energy, nuclear energy, coal-to-liquids, and others present a high cost-per-Watt than oil energy. This does not take into account the total life cycle costs, in which alternatives like solar and wind become among the most cost-effective energy sources.

          9. Replacing the current oil-based infrastructure requires time.

          Another fundamental principle of all science: going from point A to point B requires a finite amount of time. There is argument over how much time is required to replace our existing infrastructure.

          10. Replacing the current oil-based infrastructure requires money.

          A key to economic theory: a desired action can not be realized without applying an amount of currency. The amount and sources of funding are up for debate.

          11. Replacing the current oil-based infrastructure requires energy.

          In order to restructure our energy system, we must expend energy to manufacture replacement technology. This further reduces the amount of energy available after an infrastructure replacement.

          Can retreating back to these key points allow us to renew open discussions about the risks and probabilities of oil depletion? Perhaps these bare-bones facts will encourage more people to investigate the available data on their own and develop their own conclusions. We can all agree that energy deeply affects our lives, but there are far too few people exploring the possibility of a world with less available energy.

          ~~~~~~~~~~~~~~~ Editorial Notes ~~~~~~~~~~~~~~~~~~~
          PeakEngineer has worked at NASA for seven years and has degress in physics and aerospace engineering.

          -BA

          ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

          Those are good set of things to think about.
          Yes, the markets are looking at this and are taking a punt that oil will stay high or keep going up. I agree with them, it probably will, and will keep going up until you change to a cheaper alternative, use less, take a bus, bike or whatever. But then Chindia will take up the slack. Oil producers are rolling in dough, and needing more of their own production for their growing needs. All factors to push oil up.

          Those who get their teeth into the coming changes will be the ones to make the money this time, creating real capital in new energy sources, which is what we lack now.

          Shuffling existing houses around is not a productive use of capital (which is probably why they all use debt), so I hope it goes out of fashion for the economies sake.
          Find The Trend Whose Premise Is False - Then Bet Against It

          Comment


          • #6
            whew that was a bit heavy.

            I do know for a fact that China is stockpiling oil rather than Forex as a hedging tool - they rightly have no faith in the US dollar as a hard currency, and do not see Euro as a viable option.

            I'm no economist, but do understand the impact of this fundamental shift in thinking. Oil is the only thing China values more than its own currency.

            Here's a thought:
            http://www.trademe.co.nz/Browse/List...x?id=156507172
            $10 for 200km!
            two ears and just one mouth.. for good reason.

            Comment


            • #7
              Originally posted by princess View Post
              And the money you save can be put towards your medical insurance (or even worse expenditure) for when a car hits you....

              I'm all for fuel efficient vehicles (we bought a Prius late last year when oil was relatively cheap at $90 a barrel or so - I kinda feel like a legend now), but I'd never sacrifice personal safety.

              M
              Comments may not be relevant to individual circumstances. Before making any investment, financial or taxation decision you should consult a professional adviser.

              Comment


              • #8
                PeakEngineer has worked at NASA for seven years and has degress in physics and aerospace engineering.
                It's official!

                It DOES take a rocket scientist to work out why fuel prices are increasing.

                Paul.

                Comment


                • #9
                  Originally posted by princess View Post
                  whew that was a bit heavy.

                  I do know for a fact that China is stockpiling oil rather than Forex as a hedging tool - they rightly have no faith in the US dollar as a hard currency, and do not see Euro as a viable option.

                  I'm no economist, but do understand the impact of this fundamental shift in thinking. Oil is the only thing China values more than its own currency.

                  Here's a thought:
                  http://www.trademe.co.nz/Browse/List...x?id=156507172
                  $10 for 200km!

                  That is exactly why I own one of these


                  Not always the most fun in this cold wet weather, so sometimes I chicken out and take the car.

                  Comment


                  • #10
                    $2.13 you are paying far too much, if you spend over $200 at foodtown you will save 15cents a litre, with a 1000 litre tank of petrol that is a saving of over $150.00 and you get $200 worth of food as well, for a total saving of $350.00, you do this several times a week and you will soon have saved enough for a depoist on a property to increase your wealth. The fools who do not see this do not realise the increasing petrol prices can make you rich.

                    Comment


                    • #11
                      Originally posted by orbital View Post
                      $2.13 you are paying far too much, if you spend over $200 at foodtown you will save 15cents a litre, with a 1000 litre tank of petrol that is a saving of over $150.00 and you get $200 worth of food as well, for a total saving of $350.00, you do this several times a week and you will soon have saved enough for a depoist on a property to increase your wealth. The fools who do not see this do not realise the increasing petrol prices can make you rich.
                      There is normally a limit on quantity, 100 litre delivery.

                      Comment


                      • #12
                        Is it just me or is anybody else struggling with the concept that you can SAVE $350 this way, and not only that but several times per week???? How many 1000 litres of fuel do you get through?

                        LOL

                        Comment


                        • #13
                          Haha yes it is a lot of fuel. My wife and I would go through that much in 2-3 months though! Hence the fuel price rises are HURTING.

                          Comment


                          • #14
                            Originally posted by Mark_B View Post
                            From what I have read, recent oil price rises are driven by speculation.
                            You might be onto something here, Mark.
                            Can someone identify these speculators?

                            Oil was chugging along at about $75/barrel last August, then $100/barrel at Christmas and now $140/barrel.
                            The recent jump can't be attributed to more Indian motorists.

                            Now, did anything noteworthy happen last August?
                            Perhaps some global bad news?

                            Comment


                            • #15
                              That's a great summary Gatekeeper

                              A short but brilliant ES from that Engineer fellow.

                              The cheap and efficient forms of energy, namely oil derivates, are easily depleted and once the depletion occurs, it's terminal (in the sense that it takes tens of millions of years for the stockpiles to be rebuilt, and that's if the conditions are right ie. the Earth is free of human interference again - an unlikely and undesirable event).

                              The landmass is NOT depletable, although soil is exhaustible (but, again, not terminally). When the human population growth stops or reverses, there might be actually MORE land per every human inhabitant, possibly reversing the historical trend of land appreciating year after year.

                              Regardless of how much or little the mankind procreates, there's still less oil left for the next generation. New discoveries can only help retrieve what's already here.

                              Oil is entirely depletable, land's not (even a sea-level rise can be reversed). In that sense, oil is fundamentally scarcer than land is.

                              I find it bizzare it has staid cheap for such a long time. This could merely be an overdue correction, and it may not be over yet.

                              Comment

                              Working...
                              X