The only good news from the “Great Fall of China” in Monday’s stock markets is that petrol prices should start to drop, which is even more reason to go riding!
China is the second-largest consumer of oil after America, so the 9% market crash has also sent oil prices plummeting up to 6% to new seven-year lows.
Whether this will translate to lower prices at the Australian bowser remains to be seen as refineries continue to price-gouge local motorists.
Over summer, Australia had historically low petrol prices. In some capital cities it dropped to $1 a litre.
Despite crude oil falling 9% in July, a decline in world fuel demand and the drop in the Australian dollar slowing down, petrol prices have increased almost 50%.
The reasons oil companies give for the high price are many and varied, but it really doesn’t stack up against the world oil prices, demand and our dollar value.
In fact, Westpac says the difference between crude oil and bowser prices is currently the widest since 2003.
Brisbane now has the highest petrol prices in the country because of a lack of discount petrol outlets.
Petrol analysts say petrol in Brisbane should be about $1.15-$1.30, allowing for a traditional 10-11c/litre margin, but it is currently pushing $1.50 in some places with up to 25c/litre profit.
Is this a case of price-gouging by the oil companies because we are a nation addicted to petrol?
There is usually a lag of a bout two weeks between a change in crude oil prices and petrol prices.
If petrol prices do start to come down in the next couple of weeks, it may not be long before they bounce back up again, so you had better plan your epic bike trip pretty soon.
Oil demand has dropped nearly 40% in the past couple of months and some members of the oil-producing countries have even started talking about an emergency OPEC meeting.
Such a meeting could decide to reduce supply to force prices back up. The local oil companies won’t need much excuse to jack their prices up once again!