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Melody sales@mangawhaifocus.co.nz 021454814
Nadia n.lewis@xtra.co.nz 021677978
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Ed Said - Petrol prices a dream for motorists

At the time of writing, worldwide economic forces see 91 grade petrol at an al-most unbelievable $1.56 per litre – that’s in Whangarei and several other places. It’s not the same everywhere of course but price re-ductions have been massive to say the least, and also well received, but bring some in-teresting questions to the fore.

Several times over the holiday period in Mangawhai I heard it said “I’ve never seen so much traffic.” Does this mean that fuel savings are actually being used by more mo-toring families to travel further these holidays? We are told that, at current rates, savings up to $500 per year can be accrued by some. It doesn’t happen that way though does it? While you previously put $60 worth in your tank, do you now put just $50 and bank the other $10 on a weekly basis? I think not.

Another point is raised here. Documen-taries running through 2013/14 endorsed the point that oil is finite. At some point it will run out and some ‘experts’ even leaned close to putting a time-frame on this catastrophic event. Suddenly the world price per

barrel has fallen by over 60 per cent from its peak allowing the world to use more for less. We are now told there is a glut of oil and that major dealers in the petroleum industry are actually stockpiling oil expecting to make a monetary killing when the price rises again. Who do we believe? The docu-mentary The Crude Awakening makes com-pelling viewing, whatever your belief.

Given also that a huge percentage of our everyday products are petroleum-based, can we now expect a lowering of prices for say, glad wrap, plastic food containers, Lego and a whole heap of components within the car manufacturing industry? Are airfares and the costs of air and sea freight going to drop also, bringing a better deal for im-porters? And as a result are said imported goods then going to be cheaper? Again, I think not.

Low oil prices are great for consumer countries like New Zealand but it's a dif-ferent story for nations reliant on oil sales. Russia's economy is facing a potential melt-down. Venezuela is facing serious unrest and even better-prepared countries like Saudi Arabia could face heavy economic pres-sure if oil prices stay low. Unsure of what to do, following the OPEC meeting in November it was decided to continue to “produce 30 million barrels a day for the next six months, and watch to see how the market behaves.” This has created something of a price war with the USA as it is much cheaper to pump oil out of Saudi Arabia than ex-tract it from the unforgiving soils of Texas and North Dakota.

As at July 1 last year, just six months ago, petrol/ethanol blends in New Zealand had an excise (tax) of 56.524 cents per litre, though only on the petrol portion of the fuel which would still make it even cheaper were it not for such a high rate of government tax.

Do we really need to bother ourselves with what might or might not happen with-in world industry? Whatever happens with fuel prices we are powerless to control them anyway.

We have a propensity to live in the here-and-now so maybe we should just give thanks for small mercies, enjoy this little bit of affordable freedom while we can, pile the kids in the car and head for the beach.

Hope you’re enjoying summer.

Rob

 
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