I've always wanted to do a comparison of Australian Petrol prices against the Exchange rate and Crude Oil prices as I had always believed we weren't getting a fair deal. I had some spare time today so here it is.
With a substantial increase in the AUD v's US of the last several years - I had perceived that Petrol prices should have been relatively flat and that the oil companies were profiting from the changes in the exchange rate and the increasing cost of crude oil.
First point to note is this analysis does not investigate why the price of crude oil has been increasing since 2002 (although it's now down to under US$40 a barrel), this analysis simply looks at what we are paying at the pump and compares it with changes in Exchange rate and crude oil prices.
The key data series on the chart below is the Crude Oil price in AUD (which takes into account the Exchange Rate) and the Petrol Price (Perth Monthly Average). I was surprised when all the data was assembled. The red arrows show that the petrol prices and the Crude Oil price (in AUD) were nearly the same at the start of 2001 and 2004 whilst there was almost US$10 increase in crude oil (from US$25.77 to US$34.25).
The data appears to correlate quite well with the prevailing AUD Exchange rate and this has satisfied my curiosity on whether the petrol consumers were getting a good deal.
In addition, the % price change in Petrol v's crude oil was quite interesting - whilst Crude oil increased in price by 206% between Jan 01 to Jun 08, Petrol only increased by 85%.
% Change In Price Jan-01 Jun-08 % change
Petrol (AU cents) 84.97 157.75 85.65%
Crude Oil (AUD) 46.425 142.082 206.05%
So after looking at the facts, I'm a little more satisfied that the Australian prices are reasonably fair.
The 'smart' petrol money still buys on the Tuesday when prices seem to be the lowest