Subscribe to RSSMassive Oil Shock Imminent?
Local analysts are tonight predicting NZ petrol prices are about to skyrocket because of the Libyan political crisis - beyond levels we may have ever seen.
Oil prices have topped US$100 a barrel and petrol for US motorists already costs more than at any point since 2008.
Tonight's petrol price in NZ
Libyan oil accounts for less than 1% of US. crude imports, less than 2% worldwide, but concern about the uprisings throughout the Middle East region have added about US$10 a barrel. The Gulf is responsible for about 40% of the world oil exports. The region has over half of the working reserves.
Worst affected are Ireland which relies on Libya for 23% of its oil imports, while 22% of Italy’s oil imports are from Libya.
But there’s concern that as the oil companies in Libya close their plants and employees leave the country - as has begun in Libya- panic will set in and prices will go through the roof. If civil war breaks out in Libya, protests affect oil production in in oil-rich Bahrain and unrest spreads to Saudi Arabia, the experts talk of a massive oil shock.
Overseas analysts note while crude peaked at more than US$108 a barrel, reaching a 2 and a half year high after concerns began about Libya, the cost could continue to leap to US$150 very soon.
AA Petrol Watch reported this week - before Libyan unrest exploded - that, already, allowing for the exchange rate, the net imported cost of petrol has risen 16% since December 1 and diesel 18%. As a result, this has led to an 18c rise in the pump price of petrol and diesel – the landed cost of diesel being worth 6c/l more than 91 octane.
The last time commodity prices were this high was in early September 2008, when we were paying $2.00 per litre for 91 octane – but taxes were 13 cents lower, although the exchange rate was worth 8 cents less. By comparison, the price of diesel, which has no fuel excise, was $1.60 a litre, due to a higher commodity price relative to petrol at that time. At current commodity prices, the imported cost of petrol makes up about 94 cents of the price of a litre of petrol – and taxes another 88 cents (with taxes up 10c during 2010). The differential between 91 and 95 octane petrol is now 7-8 cents per litre depending on brand.
Graphic AA
Some US media are playing down the situation or saying it’s the “price of freedom:”
19 Comments
Who are these ‘local analysts’ you speak of??
@Rimu ASB’s business analyst on 3News tonight , warned of big increases . Herald’s Brian Fallow referred to it today http://www.nzherald.co.nz/opinion/news/article.cfm?c_id=466&objectid=10708270
I have a good idea, lets build more roads then. Seriously I think that people particularly in the larger urban centres are going to start making a lot of noise about needing better PT if petrol keeps increasing.
[...] This post was mentioned on Twitter by technicaljoe and samoan damsel, AKT. AKT said: Fill up your car. Experts say Libya could trigger massive oil shock http://bit.ly/hns3eY [...]
I wonder what’s going thru Steven Joyce’s mind at the moment; he’s putting all our money on backing the private motor vehicle. Must have nerves of steel. What a legacy to leave our future generations…
I’m in NZ next week (currently London based) staying at my parents house in Meadowlands, Howick. I’ll be bus’ing from there to the city out of peak and it’ll take an hour??? An hour from an Auckland suburb (not a rural area) to get to the city. As the crow flies the distance is 15 k’s. So the speed will be 15 kilometres an hour. So the locals in area’s like this can either drive and pay huge $’s for petrol or spend 2 hours a day if they commute to the city???
it is absurd that we put up with the pathetic analysis of these issues. The Libyian situation is merely the straw breaking the camels back. What, if Gaddaffi was still securely in charge would oil be back at $20 a barrel? No. The daily reporting and commentary on markets and commodities suits no one but the gamblers in suits who spend their days clipping the ticket… as well as being parasitic their focus on daily or hourly shifts blinds us to the important issues with these essential resources. No government would be forcing their people to invest in the profligate hydrocarbon use that the RoNS mean if we were having a real debate about the likely future availability and cost of oil.
Makes you very nervous doesn’t it? If Libya, SA, UAE, all going under and it could mean an end to civilisation as we know it…..
Anthony there is much less need to worry about the careers of a few dictators than about the fact that our current use of oil is unsustainable. Whoever rules these places is going to want to sell oil, the real question is are we going to be able to afford it? We arguably can’t really afford it now, we are squeezing every other part of our economy because we have built a system that is addicted to the stuff and are doing nothing to change this, get informed and get grumpy: http://www.theoildrum.com/
“If Libya, SA, UAE, all going under and it could mean an end to civilisation as we know it…..”
Good.
This is not a surprise.. Jeff Rubin and a few others which projected that that as soon as the global economy began to recover, oil prices would rise over US$100 a barrel, and the world, and NZ would be back into recession. Brent crude was already over US$100 per barrel before the uprisings in the Middle East.
Despite warnings from a New Zealand Parliamentary report, Lloyd’s Of London, the International Energy Agency, the US military and a host of other credible groups, the Herald, along with the rest of our mainstream media, has failed to report this looming crisis. Likewise our politicians avoid this issue like the plague, but they need to be held to account.
In an election year hard questions need to be asked as to why these clear and urgent warnings have been ignored and not shared with the public, and what policies the main parties have to urgently lower our oil dependency, and to plan for an imminent oil-induced recession.
more at http://oilshockhorrorprobe.blogspot.com/2011/02/ostrich-like-denial-continues-over.html
Love being in a country with electric railways throughout the country, trams in all the major cities (except Lausanne and Lucerne with trolley buses) and CNG buses in the cities.
What’s the worry? I filled my car up here with petrol a month ago and still have 1/2 tank left thanks to great public transport services.
Jon
Switzerland
@Jon Reeves
Your polititans bound to be on top, where in Switzerland are you?
Lol, Switzerland has Lybia’s and Egypt’s money - now wonder it can afford to build trams
Of course that doesn’t excuse our politicians pathetic excuse. Our current government’s motto is: “After putting all our eggs in a basket, we redefine the size of the basket as a success story.”
thanks exit lane, that blog is a nice collection of the oil-is-behind-everything thesis. Fascinating the inflation vs deflation debate, although it is rather like asking if you’d rather be shot or strangled… either way will do it. Of course globally we do have both at once; Japan has been deflating for two decades… no wonder central bankers aren’t sure whether they’re coming or going.
It is certain that we will run out of money before we run out of oil, and the only way to mitigate that is to lower our dependence on the stuff, every government decision should have to pass through an analysis as to how it helps, or otherwise, ween us off the stuff. Much would change, especially around transport spending.
In sunny Basel.
@Jon Reeves, just at a look at the transportation map, and i drooled all over my laptop, it looks stunning, all these lines for 166,000 people and 4/5 lines for Aucklands 1.3million!
http://en.wikipedia.org/wiki/File:Basel_-_Stra%C3%9Fenbahn_-_Netzplan_2009.png
Yes, it is a very extensive tram network, then on top of that you have a suburban rail (S-Bahn) network (sometimes going to the same destination as the trams but serving different areas), and of course the CNG powered bus network.
While it is 166,000 in Baselstadt, there is about another 600,000 inhabitants in neighbouring Germany (2 to 5 kms away) and France (2 kms from the centre of Basel). Manu of these folk use the Basel PT network.
An annual pass for all PT in the entire region costs 750 chf (Swiss francs), about NZ$950 per year. Most of the largest employers pay about 40% of this though, so you end up only paying 450 chf per year.
Price of petrol - who really cares here? Shame NZ has gone down the wrong path…and that path in the wrong direction is being built by Steven Joyce and his cronies big time now.
PS… petrol increased 3 centimes here yesterday and is now 1.74 chf in Basel a litre for 95 oct.
Well i bet no one cares about petrol in Basel, if the world runs on empty, the bet the swiss will be the first to recover….:)