Petrol prices “ripping Pacific people off” says Su’a Sio
Global oil prices continue their fall to record levels. Yesterday, it fell to under $30 a barrel, the first time since December 2003, representing a 72 per cent drop since the global downturn began in June 2014 when a barrel was worth $108.
But this massive 72 per cent drop in price has not been matched by petrol prices at the local gas stations, where the drop has only been by 17 per cent.
Labour’s Pacific spokesperson, Su’a William Sio blames the government for this disconnect saying it is not doing enough to make petrol companies pass these benefits to the public, especially those who are living on the breadline.
Last week, Su’a told Pacific Guardians, “a Papatoetoe gas station was selling unleaded 91 at 1.64 per litre while in Otara the same petrol station sold 91 at 1.93cents per litre – it’s confusing . We all feel a sense of being ripped off but the National government doesn’t seem to care.”
Yesterday, BP and Z announced further reductions at the pump dropping unleaded 91 to $1.83 cents per litre and diesel to 97 cents per litre.
Su’a acknowledged the reductions but pointed out “they are nowhere near far enough considering crude oil prices fell to below $30 a barrel yesterday. The last time that happened was in late 2003.”
In November 2003, petrol prices were $1.03 for 91 Octane and $0.58 for diesel according to AA Petrol Watch. “Given the prices back in late 2003, why aren’t the prices at the pump announced yesterday much lower?,” said Su’a
Su’a is calling out the government to intervene urgently so that the benefits of cheaper petrol flow through faster that it is.
“Government intervention is even more urgent considering the price of crude oil is set to fall even further,” he added
Earlier today, three major US banks, Citigroup, Goldman Sachs and Morgan Stanley say oil price could fall to $20 per barrel. While the Royal Bank of Scotland (RBS) in a doomsday prophecy said oil would fall to $16 a barrel.
“Labour has been proactive on this issue. My colleague Stuart Nash MP for Napier in August last year called on the Government to review petrol prices, but this proposal was rejected by the Government members on the Finance Select Committee.
“The government must do the right thing and commission a review into Rack Pricing. They are ripping off our Pacific communities.”
However, the New Zealand government is not alone in using the petrol situation as a cash cow.
It’s happening in India as well.
According to an NDTV report, oil in India now costs less than a bottle of mineral water. However, the drop in domestic petrol and diesel prices has not kept pace with global prices because the government has repeatedly hiked excise duty on petrol and diesel to increase its revenues.
In the US, CNN reports that the average price of a gallon of gasoline fell below US$1.97 this week, compared with US$3.68 about 18 months ago, according to AAA.
The main reasons for plummeting oil prices is the lack of confidence in China’s economy and an oil glut are putting pressure on oil prices
This is exacerbated by the political tensions amongst the OPEC players as well.
Saudi Arabia, the reigning low-cost producer, won’t cut production without a commitment from non-OPEC member Russia, which needs every dollar it can get. While Iran cutting diplomatic ties with Saudi Arabia another significant factor.
It all points not just to unstable oil and commodity prices, but also to global tensions frayed by terrorism heightening global instability.