First £1 litre of petrol

[DamianB]

http://news.bbc.co.uk/2/hi/uk_news/scotland/4685439.stm

Some of the comments are laughable - so many people are so blinkered and so badly informed

[tim]

Round my way it's averaging 91.9p per litre as of 21.07.05.

For children of the seventies like myself that is a shocking 4.89 sterling per gallon! And to think the country virtually ground to a halt when it hit a pound a gallon back then.

Shame the public can't do math - there'd have been a few more domestic fuel crises since 2000 if they could (so perhaps a relief not a shame? discuss...)

Tim

[RogerCO]

For children of the seventies like myself that is a shocking 4.89 sterling per gallon!

Or if you prefer ?4 17s 9d in pre-71 terms.
Now the interesting thing is that I have a benchmark in my head that I remember my dad filling up the car to go on holiday in about 1966 and it cost 4/11d per gallon for 'Super' (thats 24.5p) so a 20 fold price ticket rise since then...
...but wages etc have also risen by about 20 times since then so in 'real' terms (% of average earnings required to buy a gallon) the price is pretty much exactly the same.
There is a graph on one of the many PO presentations around that illustrates this and gives accurate source data (if I can find it again I'll post below) - the bottom line is that the price of petrol as experienced by the end user has not gone up in over 40 years.
This is entirely consistent with PO theory and Hubberts curve - on the rising production side of the bell curve supply can always balance demand so the price will remain pretty stable (and can be controlled artifically through cartels and taxation).
Once we are past the production peak, supply can no longer balance demand, so demand has to be reduced either through free market price rises creating demand destruction, or through state intervention demand management (rationing).

The future is simple - either the price will rise in real terms (at last), or control will be introduced (or both in whatever balance maintains the status quo of political power)

[tim]

I'd dispute that 'real term' waages are the same. We are constantly lied to about wages rises versus real cost of living. For example, I was in retail bookshop management for 16 years, and the starting salary 1986 is only ?1500 (on average) more today - then it was ?13000-14000 now it is 15000-16000. Yet costs are way higher for bread, fags, booze, houses, etc (though luxury electronic items have dropped in relative price). My weekly food shop has more than doubled - if my salary had I'd be on near 30,000 for entry level small chain store managment.

The govt like to tell us that the average salary is around 19-22,000, yet the average person on the street is on 10-12000 if their full time, or are part-time (under 15 hours) cheap labour, or are unemplyed, or more likely on incapacity, where the stats massage shoves them to keep 'official' unemployment figures down.

All this and more makes an honest assessment harder, and obviously 60's to mid-70's wages (and cost) were different again.

The bottom line is, fuel could be much cheaper right now by dropping the tax duties. These don't go on green options and promotion, so it's hardly a green tax (though it could be - different argument).

Tim

[peaky]

I always check the price at the Total station round the corner from me - on the last big rise it reached 89.9 and stayed there for ages then dropped back. Over the last few weeks it went up about 1p every other day over a week until it reached 89.9 again. It's been there for a week now. I've wondered whether they fear the crossing of a psychological barried each time another 10 is crossed and try to hold back as long as possible?

[RogerCO]

Here's the chart I mentioned above - it only goes back to 1980, I think I've seen another one which goes further back and carries the same message.

Source is Jos Dings of European Fedaration for Transport presentation to IEA/ECMT conference on Managing Oil Demand, Paris, March 2005.
The thick purple line is the weighted (across EU15 by consumption I think) real (adjusted for rpi) price (including taxation).
It shows real price in 2005 same as 1980.