Sunday, July 14, 2013

The price of fuel

David Shearer is upset at the rising price of fuel; Scoop reports:

“Kiwi families have been hit with a triple dose of bad news in the last 24 hours, with petrol prices, power prices and food prices all jumping sharply,” says Labour Leader, David Shearer.
“Just in time for the school holidays, petrol prices went up four cents a litre to $2.26.9 for 91-octane. That’s on top of the July 1 three cent increase courtesy of the Government hiking up petrol tax.

Now he might have a point about petrol taxes. But that's pretty much where Mr Shearer's complaint ends. We wonder if he understands the drivers behind fuel price rises. Here's what a BP spokesman said last week:

BP spokesman Jonty Mills said the company's last price rise had been on June 7, and since then the exchange rate had fallen from US80c to as low as US77c.
The decline in the NZ dollar had driven most of the latest price rise, although during the past four weeks the cost of refined product had also risen, he said. 

The New Zealand economy is miniscule in size in comparison to those which drive the prices of fuel, especially the US economy. In reality, there is precious little that we can do to control fuel price rises domestically.

But it is not that long ago that David Shearer and his sidekick Russel Norman were calling on the Government to instruct the Reserve Bank to intervene to lower the value of the New Zealand dollar. Can you imagine the effect that would have had on prices at the pump?

Sorry Mr Shearer, but you can't have it both ways. Whilst the high New Zealand dollar made things tougher for exporters, imported goods such as crude oil were cheaper. And all the while Labour and the Greens oppose any moves towards oil exploration off the New Zealand coastline.

Wethinks Mr Shearer doth protest too much.

5 comments:

Anonymous said...

come on KS, fuel prices are ridiculous and unfair. Or do you like paying such an exorbitant price. Families are being hit hard, far harder than in Aussie. Food and power, yep, through the roof. Or do you earn big bucks too?

Dave

Edward the Confessor said...

Except that when it suits you the government can control petrol prices:

http://keepingstock.blogspot.co.nz/2008/12/brownlee-2-oil-companies-nil.html

And your chums put the tax up, making it more difficult for all Kiwi mums and dads (including the ones they fleeced on the MRP sale). Working for all NZers as usual.

Anonymous said...

Yes Edward

The Government fleeced Mums and Dads by building new schools and Hospitals with the MRP money and by not increasing the Mums and Dads debt to cover the permanent structural deficit created by that amazing Government run by Madam Clarke.

What Labour and the Greens should be proposing is a devalued dollar for our exporters and a revalued dollar for our importers.

I'm sure the highly knowledgeable experts currently infested the halls of parliament on the left could work something out.

I'm sure you could add your sixpence worth Dave

Mark

Keeping Stock said...

@ Mark - you know should shouldn't try and baffle people like Edward with facts; they simply can't cope with it, because it undermines their bluster and faux outrage.

Edward the Confessor said...

"What Labour and the Greens should be proposing is a devalued dollar for our exporters and a revalued dollar for our importers."

You mean in the way that KS argues it's the government's doing when petrol goes down in price and nothing to do with them when it goes up (despite the tax increase)? Like that?

On MRP, the government overvalued the asset, screwed Mum and Dad investors and intends to waste the proceeds on irrigation schemes for its mates. It's called governing for all NZers.