00:00In recent times, the OPEC price has gone up. It's about half of what we pay, and it's skyrocketed
00:08with the Middle East war with Ukraine. And then, on top of that, there are the regular
00:14taxes. They're about another third of the price. And then the service stations and the
00:19oil refineries get just about 15 per cent.
00:24What I don't understand, Alan, though, is I can start out from home and there'll be,
00:28let's just say it's $2.13, and then 20 minutes down the road it can be $1.83. I mean, why
00:35does that happen?
00:36Yeah, well, it's impossible to explain. The oil industry does a pretty bad job of it.
00:43But what sort of happens is there's a big cycle, and the price falls way to the bottom
00:49at the end of the cycle, and someone takes it right up the top. And while everyone's
00:54moving up at different pace, you get the big differences.
00:58Could the government legislate to help?
01:00No, it's tried many times before to regulate petrol prices, but it's been quite unproductive.
01:07It hasn't affected how much motorists actually pay.
01:10And what about taxing, then? I mentioned it there. If they cut the tax on fuel, that would
01:16make a difference?
01:17Yes, that makes a difference to the cost of living, but it increases the budget deficit,
01:24which is not very good for inflation. On top of that, another big factor is that due
01:29to the rise of electric cars, the amount of tax the government's collecting from petrol
01:35is falling every year, and one day they'll have to replace that.
01:39Well, that's interesting. So what are you seeing is the impact that this is having on
01:44families and their bottom lines?
01:47It's very big. I mean, the average family pays $5,000 a year for petrol. And then when
01:54it goes up, well, 10%, that's $500. 20%, you know, very large amounts of money go into
02:02it. And it's largely unavoidable spending. You have to use the car.
02:07Yes, so policies to reduce our use on car are something that the government does look
02:14at. But because of the nature of Australia, are you saying that people just have to use
02:19their cars? Transport networks aren't good enough?
02:21There are many areas, just take where we are in Sydney, there are many people in outer
02:25Sydney, no choice but to use a car, by the way, on a toll road, which adds to the cost.
02:33And also, people like to drive in cars, they're not very keen to switch to public transport,
02:40they prefer to pay the higher price.
02:43You mentioned toll roads, and it's not just that with cars, you've got the petrol, you've
02:47got the insurance and the tax on that as well, so that the whole cost of it to a household
02:53budget is enormous.
02:54Yes, the registrate, all of those things have been going up. As I said, the latest cause
03:00is OPEC, that's really taken things up a huge amount. There are no great signs that it's
03:07going to come down in a hurry globally. It's come down a bit. In most of Australia, things
03:12come down maybe 30 cents from the numbers you talked about for April.
03:18Yes, OK, which was in the 220s. Coming back to the disparity, I see again, where it can
03:25be 60 cents difference from one petrol station to the next. In other countries, that doesn't
03:32happen. I'm thinking of in Europe, there's only three or four pence difference between
03:37them. Why does Australia have such a big gap of what people are allowed or do charge?
03:41Yes, so again, what has happened is we've got into this sort of price wars, which for
03:48a long time have generated this instability that someone starts out, let's say, at the
03:54beginning of the month, everyone's on a high price. Someone cuts, others follow it, then
03:59they go down further, keeps going right down till they get to the bottom, and then there's
04:05a jump right up to the top again.
04:07So we should say to people, there are some very useful apps, aren't there, for people
04:10to check petrol prices and to see where they're getting the best deal, but what do you do
04:13to ensure your motoring costs aren't too high?
04:15Well, me, actually, I've got an electric car, so I don't incur those costs.
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