Subscribe to RSSHouseholds Hit By Petrol Price
More evidence today why people are turning to public transport -and why public transport overcrowding has resulted in recent weeks.
Petrol prices increased 17.1% in the year to the March 2011 quarter, according to the Statistics department today, which confirmed the inflationary pressures hitting households.
The consumers price index rose 0.8% for the March 2011 quarter, reflecting higher prices for petrol, cigarettes, tobacco, and food.
The CPI measures the rate of price change of goods and services purchased by households. Statistics NZ visits 3,000 shops around New Zealand to collect prices for the CPI and check product sizes and features.
The prices affecting transport rose 2.5% in the March 1 quarter, with a rise in petrol prices of 9.7%. The overall picture was helped by a a seasonal fall of 9.2% in international air fares.
Statistics Department’s Chris Pike said: “Petrol prices have increased strongly over the past six months and at the end of March were only slightly below their peak in July 2008.”
In the year to the March quarter, the CPI increased 4.5%, including a 2.3% increase in the December 2010 quarter when GST rose from 12.5 to 15 percent. Significant upward contributions in the year to the March quarter came from higher prices for transport (up 8.2%), housing and household utilities (up 4.0%), food (up 4.8%), and alcoholic beverages and tobacco (up 11.4 %).
The price passed the psychological $2 barrier
This is not a blip. Any reading of oil prices and the state of the oil economy amid Middle East unrest means the prices are going to keep rising.
Global rating agency Fitch Ratings, with the help of an economic modelling tool from Oxford Economics, has simulated the impact of a severe oil price shock on the global economy. It has created a ‘worst-case scenario’, where the price reaches $200 a barrel in the second quarter of 2011.
The oil price would average $150 a barrel for 2011 and $90 a barrel in 2012.
The economic impact would be severe. This could drag many advanced economies back into recession. At the same time, inflation would rise, increasing pressures in already heated emerging markets.
In order to meet household budgets, people are turning to trains and buses and will continue to.
Inflation is something the Government watches closely because of its political and wide economic implications. So when are road-obsessed politicians going to wake up?
17 Comments
“The oil price would average $150 a barrel for 2011 and $90 a barrel in 2012.”
What gives them the misplaced confidence that it will go back to $90? Or if it does, will stay there longer than it did the last time?
Petrol goes up 17%, yet my pay increases by 2%. Unbelievable .
Owen, be thankful you got a pay increase. A lot of people didn’t get anything. No, that’s not a personal whinge, just a general observation. I’ve only had my current job for 7 1/2 months.
Matt, only because the minimum wage increased.
Touche
I’m self-employed.
I can’t afford to give myself ANY sort of pay rise. In fact, any spare $$$ goes straight back to the business - which is under severe pressure (petrol costs being a major portion of my expenses).
Aren’t we lucky that Joyce saved us from that extra few cents a litre of tax that would enable us to work towards a world class electric train network? Phew, see how he really knows what’s best. Cares for us like the Pope….
inflation is huge in the latest results. National can’t blame a GST hike on Labour’s mess.
A big increase in oil price would cause another economic slowdown which in turn would cause a price drop hence the $90 a barrel figure.
Yes Robincole is right I think, while the general trend for oil is only up, but it will be a bumpy ride as each new high throws the [western at least] world into to contraction and demand destruction. But even if we settle down now and head back to say $90 this year it will only be temporary as the structural factors are unstoppable. Check out this, the Saudis clearly do not have the recoverable reserves they claim: http://www.theoildrum.com/node/7801
And master of transport, Steven Joyce, continues to push his barrel that trucks moving freight is the way for the future of our country…when we all know that keeping railway lines open is the only real option NZ has to keep freight costs down to many regions.
Time to barrel Joyce up on his rather insane judgement.
Petrol is now so expensive! It’s really changing the way I use my car, and friends that don’t live close to decent public transport are having to tighten up on other spending.
“Petrol goes up 17%, yet my pay increases by 2%. Unbelievable .”
While the seniors in my company have company cars, and get a huge pay rise every time the fuel price goes up, as the fuel is paid for them. Grrrrrr. ANGER.
Then again, not having a car, and walking 80% of the time, I am still flush with lots of money. My transport costs are minuscule. Very obviously doesn’t work for everyone, but an very pleasant example of where (disposable!) income should go to, I think. No car repair bills either.
It will go back down when Libya settles I think. It’s the only reason it’s so high at the moment.
Once cars like the Holden Volt come on to the market, private motor vehicles will become environmentally friendly. Which is why I think we shouldn’t be shying away too much from building roads in urban areas.
But I would much prefer to see freight on rail to save on road maintenance costs (and trains are cool
).
Luke, except that Libya is not the only hotspot in the region now. Syria is getting twitchy, and a lot of the big oil producers are distinctly nasty theocracies/autocratic monarchies with large populations of unhappy people.
I wouldn’t count on Middle Eastern unrest settling down in the next nine to 12 months, and if Saudi or one of the Emirates turns to custard then things will get a lot more painful. Part of the price right now is calculating in the risk of unrest spreading - Libya is only the 8th-largest oil producer, and there’s spare capacity in the global production system at present.
As for electric cars changing vehicles to be less-petrol guzzling - a) I see no way that electric cars will make any big dent in the next 10 years. No one has yet solved the energy storage problem and b) even if, lots of electric cars do not solve the fact that motorways and 6-lane arterials are horrible things to do to a city.
Err Luke, be careful to dig a little deeper when following the news stories around oil, there is too much at stake for almost anyone to be telling it straight. Yes oil could well drop this year, if it does it will mostly be because of a decline in demand from the west. Americans are not driving like they used to, because they just can’t afford it, not because they suddenly all have Volts and Leafs [they don't]. The electric car is an unaffordable sideshow. The Saudis are looking like they’re in decline and are about to enter their summer air-con ramp up of domestic use… yee-ha, the only reason the growth in demand from producing countries and Chindia hasn’t sent the price north of $200 is because the west is crumbling…. And we live in that world too: Importistan, right let’s get building more motorways with borrowed cash…..