Subscribe to RSSAA Assures Motorists Petrol Prices Won’t Always Go Up
AA doesn’t think the price of petrol is now going to be one way only – up.
In its latest PetrolWatch report, spokesperson Mark Stockdale, says looking ahead: “We would not expect the rapid price rises experienced in 2008, but rather moderate variations up as well as down.”
AA believes the recent high petrol price leap was partly in response to increasing worldwide demand relative to supply, and a declining exchange rate.
“As the global economy improves, demand for fuel is expected to slowly rise. This may put some pressure on refinery output and supplies, which were cut back after demand fell significantly following the global economic crisis in the latter half of 2008.
“However there is ample spare refining capacity and new refineries coming on line. Supplies should therefore be able to match demand in the near future and we would not expect the rapid price rises experienced in 2008, but rather moderate variations up as well as down,” says Mr Stockdale.
Petrol prices rose during March to over $1.80 per litre for the first time since October 2008, before dropping back to $1.76 at the start of the Easter holiday period. The price of a litre of 91 octane petrol in March increased a total of 8 cents, the first increase in over six weeks and up from $1.73 in the main centres. Diesel rose 5 cents per litre in March to end on $1.16.
“With petrol prices hovering around $1.50 to $1.70 throughout 2009, people became use to relatively stable prices, so the recent increase to above $1.80 seems to have hit an uncomfortable point for motorists who are concerned that prices may be on the up.”
3 Comments
“Stable prices” is a relative term, and we are getting used to shorter and shorter definitions of what ‘stable’ means. I have to say that I half agree with his analysis that prices will be somewhat slower going up and down for the near future. Every time the oil price spikes, the economy will slow, bringing it back down.
My current best guess is that we won’t see outrageous oil/petrol prices until after the peak in 2014, when the global economy gets slammed the final time and oil prices crash. After the dust settles and decline rates get locked in, the prices will begin to climb again, and we’ll finally see the persistent (read ‘stable’) high petrol prices that will be our legacy.
In the meantime, it will be a roller coaster as we keep bumping up against the limits to growth.
The USDOT comissioned a study on peak oil, it found one of the likely outcomes is wild variability in oil prices, which sadly will disguise the problem… Anyone who says they know what the price of oil will be in a years time is guessing…
In May 2009 Bill English signed a document….called the budget which talked up roads of “national parties” significance because treasury has stated the price of oil in 2013 will be US$69 a barrel.
Hahahaha like they know…and Bill English signed it off. Hahaha….still laughing!