Are you wondering, as I’m wondering, just why the price of petrol at the bowser keeps going up & up, while politicians continue to tell us how strong our economy is?
Ever wondered why every news bulletin recites oil prices per barrel in US$ based on benchmarks which bear no relation at all to Australian bowser prices? Take at look/listen at/to the next news bulletin you come across. I’ll wager the oil price per barrel in US$ is quoted as either West Texas Intermediate (WTI) or NYMEX Light Sweet Crude. The latter being traded on the New York Merchantile EXchange, hence the name. Other calibres of the black gold include Brent (North Sea), Urals (Mediterranean) and Dubai (Persian Gulf) crudes, none of which impact on the prices we pay primarily because it’s too expensive to import massive amounts of oil from far flung terminals. Admittedly, some of these crude products do make their way to Singaporean terminals where it’s either traded or refined and on-sold, and where Australia supposedly purchases its import oil requirements.
Primarily, our nation’s petroleum requirements are self-satisfied to approximately 65% of capacity, but that level is falling as Bass Strait, Tasman and North West Cape fields rapidly reach maximum outputs. Naturally, we need to make up the difference through imports. Australia’s principal source of oil imports comes through the Singaporean trade terminals, mainly from Malaysian and Indonesian oil fields. Singapore price structures are based on what is known as TAPIS, which refers to where Malaysia’s bulk of oil production originates. A plethora of detail on the oil marketplace concerning Australia may be found on the Australian Institute of Petroleum website. The ACCC site also has some interesting mumbo-jumbo, but if you’re like me and wouldn’t trust Graeme Samuel to lie straight in bed, it’s all just a lot of voodoo mantra.
What I’ve found fascinating, and trust me, it took a lot of searching to find, is the marked differential between the spot TAPIS price of crude oil and any other benchmark price. For example, NYMEX Light Sweet currently stands at US$64.94/barrel; WTI stands at US$64.86/barrel. TAPIS crude is currently at US$74.61/barrel. A solid US$10/barrel above the other commonly quoted standards. TAPIS has been much higher, only last year in August, at US$ 82.18/barrel while the A$ at the time bought only US$0.76. Currently, the Aussie buck will buy US$0.83 so the burning question just has to be, “Why are we paying so much for petrol now?” Additionally, if, as the ACCC, Caltex, BP, Shell and lords only know how many other happy-happy joy-joy trust-us-would-we-lie-to-you producers, refiners and regulatory authorities tell us, that Australia’s oil comes from all over the shop, why are we subject to an escalated price from a monopoly marketplace?
I’ll be the first to admit that I don’t understand the vagaries of the futures markets, nor the obviously even more complex petroleum sale, re-sale, refining, export and import markets, but as a consumer, I’m not at all comfortable with the explanations currently being handed out by the vested interests concerned. As I stated above, it’s all mumbo-jumbo and voodoo mantra stuff. At the very least, we deserve a rational explanation regarding the disparity over exchange rates versus imports. Not tongue-in-cheek excuses revolving around northern hemisphere winters or US holiday season gasoline consumption figures.
It’s been way too easy for greedy refiners and toothless regulatory authorities to proffer baseless excuse after baseless excuse in explanation of what appears to we consumers to be yet another rip-off. Yes, we’re captives to the marketplace, but only so while we sit pat, saying and doing nothing. The question is though, what can we do which has potential for real impact? Maybe it’s time to research the 100% ethanol engine and start entertaining the idea of sugar beet futures?