“High petrol prices are bad for the economy and they’re very difficult for consumers,” Mr Costello. Source: SMH
With comments like this being flagged around and most of us are starting to feel the difference of petrol prices effecting our budgets, What’s your view of this effecting the investment market, if at all??
Considering an average person that used to spend $50 per week on their petrol bills and now facing a 40% price rise in petrol prices, which will raise the average petrol bill to $70, that’s just about enough to be able to afford an extra investment property! (hypothetically)
What can we do to make the difference? Not buy petrol on a particular day? Protest? Be heard? Write an article? Buy more fuel efficient cars? Or just put up with it and work smarter to make more money so it doesn’t affect us at all…
Will this create another great “Buyers Market†to buy investment properties whilst everyone else backs off??
What’s your Say??
Roy H.
L.R.E.A., Dip FS (FP)
Guardian Property Specialists (GPS)
http://www.gpsnetwork.com.authis may affect where people purchase property. People might want to buy where they dont have to drive as much Eg. close to transport and CBD.
Working for an oil company and enjoying substantial pay rises in the past 6 months, property has become alot more affordable.
Our petrol bill has gome from about $ 160 up to $ 220 per month. This is chicken feed in the grand scheme of things when compared to the pay rises received from the high oil prices.
Wait ’til we have 120 oil, the sheiks I work with will be able to buy the whole of Australia for cash. At 10 MMbbls/day, that’d be 1.2 Billion USD in revenue every day….it’s gotta find a home somewhere !!!
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
what is the price in sydney at the moment?
Get your money working for you instead of a bank! You could earn up to 3% PER MONTH on your money. Ask me how!
Originally posted by GPSNetwork:What can we do to make the difference?
Not buy petrol on a particular day?Um, Nah. You got that email too? Won’t work
Protest?What? Who?
Write an article?About what?
Buy more fuel efficient cars?Now you’re talking!
Or just put up with it and work smarter to make more money so it doesn’t affect us at all…Yup.
Only higher prices will lead to lower demand…. which will lead to lower prices.
And as Dazzling says, petrol/oil is cheap.What’s your view of this effecting the investment market, if at all??It’s certainly suited my investment strategies perfectly… refer to this post from 08/04/05:
And FWIW, I’m not throwing my hands up over the price of oil – my BHP, OSH & ROC more than make up for any pain I feel ‘at the pump’.Bought BHP @ $17.60, sold $20.30
Bought ROC @ $1.80, sold 50% @ $2.60, currently $2.35
Bought OSH @ $2.35, currently $3.49.Same timeframe, gold up $40/oz.
Silver – volatile.Cheers, F.[cowboy2]
Oxygen Funding: it’s hitting the $1.40 per liter mark.
So through what I gather everyone here is not concerned about this either??
Roy H.
L.R.E.A., Dip FS (FP)
Guardian Property Specialists (GPS)
http://www.gpsnetwork.com.auI’m a bit like foundation. Fortunately I saw an oppitunity in the sharemarket. Still hold all.
High oil prices will be good for the economy. Australia is a net energy exporter. The money being made now from coal and gas and soon uranium is astronomical. We still produce a lot of oil as well though we are net deficient. Grain for ethonol.
It could be bad for some parts of the property markets. Perhaps put a dent in the ‘tree change’ lifestyle property market if the property is out of the way. Also the outer suburbs where traveling is a big cost. Winners may be the areas close to the CBD. Walk to work and shops stuff. The inner city Sydney and Melbourne markets are where the next boom will start anyway, just like always. Not for a while though.
Good luck.
Oil Price compared to cars and milk..
Interesting read..
an AMP Analyst compared the rise in price of oil since 1980 to the milk and commodore cars over the same period..
Oil is now up 75%
Milk is up 262%
Commodore car 326%
Average wage up 351%
All Ords up 656%
House Prices up 708%
However, Oil is taking the pressure off interest rates as the main tool to reduce inflation, it acts like a rate rise or tax decrease.
The burden of boom control shifts from borrowing, to transport, meaning it is more widely spread and direct…
[biggrin]
REDWING
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow CalculatorAwesome stats there, now with Petrol & Milk matching up in value per liter, what’s more necessary? Is it a fair match in cost?
Roy H.
L.R.E.A., Dip FS (FP)
Guardian Property Specialists (GPS)
http://www.gpsnetwork.com.au“What can we do to make the difference? Not buy petrol on a particular day? Protest? Be heard? Write an article? Buy more fuel efficient cars? Or just put up with it and work smarter to make more money so it doesn’t affect us at all…“
I think that car sales will increase for the more energy-efficient and lighter cars.
Cars are more affordable than they were years ago.
Also, people might switch to LPG (my husband’s ute runs on LPG).I do think that the Australian petrol prices are not too bad when you compare them with the price of petrol in some European countries- like €1.60 (about $2.60) per litre while their average income is about the same as it is here.
Celivia
Just recieved this email?
IT HAS BEEN CALCULATED THAT IF EVERYONE IN AUSTRALIA DID NOT PURCHASE A
> DROP OF PETROL FOR ONE DAY AND ALL AT THE SAME TIME, THE OIL COMPANIES
> WOULD CHOKE ON THEIR STOCKPILES.
>
> AT THE SAME TIME IT WOULD HIT THE ENTIRE INDUSTRY WITH A NET LOSS OVER
> 4.6 BILLION DOLLARS WHICH AFFECTS THE BOTTOM LINES OF THE OIL COMPANIES.
>
> THEREFORE THURSDAY SEPTEMBER 22nd HAS BEEN FORMALLY DECLARED “STICK IT
> UP THEIR BEHIND ” DAY AND THE PEOPLE OF THIS NATION SHOULD NOT BUY A
> SINGLE DROP OF PETROL THAT DAY.
>
> THE ONLY WAY THIS CAN BE DONE IS IF YOU FORWARD THIS E-MAIL TO AS MANY
> PEOPLE AS YOU CAN AND AS QUICKLY AS YOU CAN TO GET THE WORD OUT.
>
> WAITING ON THE GOVERNMENT TO STEP IN AND CONTROL THE PRICES IS NOT GOING
> TO HAPPEN. WHAT HAPPENED TO THE REDUCTION AND CONTROL IN PRICES THAT THE> ARAB NATIONS PROMISED TWO WEEKS AGO?
>
> REMEMBER ONE THING, NOT ONLY IS THE PRICE OF PETROL GOING UP BUT AT THE
> SAME TIME AIRLINES ARE FORCED TO RAISE THEIR PRICES, TRUCKING COMPANIES
> ARE FORCED TO RAISE THEIR PRICES WHICH EFFECTS PRICES ON EVERYTHING THAT
> IS SHIPPED. THINGS LIKE FOOD,
> CLOTHING, BUILDING SUPPLIES MEDICAL SUPPLIES ETC. WHO PAYS IN THE END?
> WE
> DO!
>
> WE CAN MAKE A DIFFERENCE. IF THEY DON’T GET THE MESSAGE AFTER ONE DAY,
> WE WILL DO IT AGAIN AND AGAIN.
>
> SO DO YOUR PART AND SPREAD THE WORD. FORWARD THIS EMAIL TO EVERYONE YOU
> KNOW. MARK YOUR CALENDARS AND MAKE SEPTEMBER 22nd A DAYTHAT THE CITIZENS> OF AUSTRALIA “ENOUGH IS ENOUGH!”.
That email has sure made it’s way around Australia..
Roy H.
L.R.E.A., Dip FS (FP)
Guardian Property Specialists (GPS)
http://www.gpsnetwork.com.auIT HAS BEEN CALCULATED THAT IF EVERYONE IN AUSTRALIA DID NOT PURCHASE A DROP OF PETROL FOR ONE DAY AND ALL AT THE SAME TIME, THE OIL COMPANIES WOULD CHOKE ON THEIR STOCKPILES.Would love to see the calculations !! I think you’d be able to drive a truck through the holes in it.
AT THE SAME TIME IT WOULD HIT THE ENTIRE INDUSTRY WITH A NET LOSS OVER 4.6 BILLION DOLLARS WHICH AFFECTS THE BOTTOM LINES OF THE OIL COMPANIES.No it won’t…the consumption won’t be halted. I predict the email won’t reach any more than 5% of the motoring population in Australia. A mere blip at worst / best….depending on which side of the fence you sit on.
WAITING ON THE GOVERNMENT TO STEP IN AND CONTROL THE PRICES IS NOT GOING TO HAPPEN.Absolutely correct. I hope you are not under the assumption they control much. This game is bigger than entire countries. The tiny Australian government and the even smaller (read irrelevant) Australian population shall dance to the tune that is chosen for them. Sitting on the sidelines not partaking in the dance is not an option the Kings / Sheiks / Emirs / Presidents will present to the consuming public.
WE CAN MAKE A DIFFERENCE. IF THEY DON’T GET THE MESSAGE AFTER ONE DAY, WE WILL DO IT AGAIN AND AGAIN.Our entire daily production and consumption is less than 1% of the worlds figures. We are a fly speck. Another example of myopic untravelled Australians thinking we actually register on the world scale…we don’t !! I predict this whole nonsense is at best going to affect 5% of 1% for one day….I’m sure you’ve got them quaking in the desert sandals.
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
Well put Dazzling… and you didn’t even mention stockpiling capacity at either side of the refining process, or the willingness of other countries to take this unwanted supply off our hands at the price that we’re apparently not prepared to pay…
I got this email last week as it travelled around work, but mine said September 5 was the day. Across the road I was amused to see the service station adjust it’s price from 127.9c/l to 132.9c/l on the very day. I guess that proves it didn’t work!
Cheers, F.[cowboy2]
Personally I think we should start an email about beer. I would like to see a graph of the price of a pint over the last 20 years compared to the price of petrol. The govt should drop taxes on beer – it is a regressive tax on a necessity and it direlcty affects people who can least afford to pay it. I would propose we all not buy it for a day, but there would be fat chance of that happening! maybe Wollies can start a 4c per litre off scheme?
http://www.megapropertygroup.comINVESTMENT SALES * RENTAL SOLUTIONS * STRATA MANAGEMENT
I’m with AUSPROP..My Dad used to keep a Swan Brewery staffs wages for a year, now with mechanisation he can only keep a machine employed for an hour..
Plus if your p***d you forget your problems :o)
(joking of Course- Its Friday)
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow CalculatorThe cheapest petrol supplier in my town (yes, the 132.9c/l mentioned above) is conveniently also a bottle shop. I try to always buy a couple of bottles at least every time I fill up – at 600c/l for VB and around 900c/l for premium, it puts some perspective on petrol prices.
I suspect that beer inflation is running well higher than milk.
Another couple of thoughts on oil – it looks like a number of US states are going to bow to public pressure and remove/reduce tax on ‘gasoline’. On the face of it this seems like a good thing for mister G. P. Ublic, but when you dig a little… Setting aside the inevitable profit margin increases that would follow thanks to refiners and service station greed, this would effectively increase demand for a product that was in fixed supply and thanks to Katrina, is now in short supply. This situation would very soon return to equilibrium – the point where the price stops demand from being higher than supply… ie, roughly the same price as before (perhaps a little higher!~). The governments, by taking the popularist route would still have to deal with public outrage yet be losing a large revenue source.
Thought 2: Transport companies in the UK are again looking to blockade refineries ‘in protest’ against high prices. This has been done before in a number of parts of Europe, around 5 years ago. The result was a shortage of petrol, temporarily higher prices, empty supermarket shelves etc, followed by government intervention – from memory I think the UK govt froze their petrol tax. At the same time our government* reduced its excise by a few cents a litre and removed the CPI increases, although I don’t recall any blockades, just a whole lot of p**sing and moaning about petrol hitting the psychologically unsettling 100c/l.
As explained above, any of these actions will only add to consumer pain, add to global demand and add to the price of oil/petrol. Food for thought.
Meanwhile the price of oil has fallen from $70 to US$64/barrel as the Australian dollar has risen from under 75c to 77.5c. A barrel of oil now costs AU$83 – down from $AU93 last week – an 11% fall. That’s the good news. The bad news is that both are likely to be temporary. The fall in oil is due to the generosity of oil producing companies/nations and the US government who are drawing from their reserves to try to prop up the US in the wake of the hurricane. The fall of the USD is based on the belief that the US Fed will have to stop hiking interest rates to prop up its economy… which is not a done deal with inflation running at 5%pa over the last 6 months. Link Here
But then again, it was largely the Fed’s response to the Tech wreck and S11 that drove the world to its current unbalanced and inflationary situation, so who knows. Anyhow, for oil, more easy money means yet higher oil prices, gold prices. Etc etc ad nauseum.Regards, F.[cowboy2]
I work in the mines. [builder] Mining powers australia’s economy.
I’d like to see someone try n tell all the mining pty’s that they’ve gotta park up there fleets for 24hrs, n shut down all those pesky iron ore trains & export ships, & turn around all those fuel roadtrains enroute to sites, n such.
It’d be worth it, because the industry wouldn’t stop laughing [laughing]for about a week, and everyone up here would be in such a merry mood from all the humour.
Life’s not that simple. I got that email n deleted the sucker. Yes fuel does impact us here in the mining industry. Where i am, last year’s fuel and energy costs were budgeted at 42%. [dead2]Thats a lot. For us this year, increased commodity prices have offset increased fuel prices.
Everythings in balance: the individual, the pty and the economy.
That email, although it meant well, wasn’t thought through.
As for me, i drive a HZ with a great big stonking V8, and i love it, n wouldn’t trade it for all the tea in china. [bike2]
“Earth first, we’ll mine other planets later.”
Cabo Wabo
Great inside feel of the mining industry..
Well there are talks now of the government taking a chunk of the petrol taxes or even bigger tax breaks for small businesses that regulary use their vehicles, Although I can’t see it happening till another election comes up and use that a promotional campaign..
Roy H.
L.R.E.A., Dip FS (FP)Guardian Property Specialists (GPS) is a research-focused company that specialises in sourcing and providing residential investment properties Australia wide!
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