Tuesday, 3 April 2012

Fuel price fiasco !

Easter is just a few days away and - surprise - surprise - petrol prices have suddenly climbed to this year's high.   We are asked to pay just over $ 1.50 a litre to fill the car.

Of course, those who avidly watch the world price of a barrel of oil on the nightly news will note that the price has been dropping while that is happening, but then oil prices and petrol prices do not really share any sort of common relationship.     There is usually a gap of months between what comes out of the ground today - and what you pay at the petrol pump tomorrow !

All this is explained by what the experts call " the fuel cycle " !    The problem is that nobody has yet managed to present any sort of coherent formula that a mathematician could understand to explain the vast vagaries that exist between logic and practice.

Perhaps a better explanation would be :    " At any time of high demand, the oil companies in collusion with other interested parties - hike the price to inflate their profits ! "

Which raises another interesting phenomenon.    The " Grocery price twin bandits " who control a high percentage of the petrol sold in this country - are offering 20 c a litre discount if you present a receipt for a purchase of $ 150 or more from their stores  at their service stations.

Now you do not need to be as clever as Einstein or have the forecasting powers of Nostradamus to see that there is an inevitable connection between these events.

When petrol reaches a historical high and is then subjected to an unusually big discount offer, the price the customer pays is actually about where it would be if the price hike had not occurred, and just the normal 4 c discount was in place.

But of course, the customer has been stampeded into making a bigger grocery purchase to reach that required $ 150 total on the receipt to gain that illusionary saving.

Magicians have a term to describe it.    Smoke and mirrors !

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