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But what's that got to do with the price of fish? - Tactical Ninja

Apr. 12th, 2011

09:15 am - But what's that got to do with the price of fish?

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This morning I was scrolling through my flist and came across an aside comment from someone that it had cost them $52 to fill their car with petrol. Since I also filled my car the other day and it cost me $100, I thought it might be time to do some actual maths.

You see, the person commenting is in the US, and I'm in NZ. The US operates in gallons and NZ operates in litres, and we have different dollar values as well, so there's no real direct comparison and I've always wondered what the difference actually was. And I've read that thing a few times where folks have said that if the price of gas in the US goes over $4 a gallon, it's the start of the apocalypse. Thus, enquiring minds want to know!


So at the current exchange rate, $52US is $66.56NZ. Since my car cost $100NZ to fill, it would indicate that petrol here is more expensive. However, the tanks might be different sizes - mine's 45 litres. So what's the unit price?

US (from here) - looks to be about $3.80 a gallon.

NZ (from here) - $2.19 a litre.

But that's not a direct comparison either. We need to do some converting. I'm gonna go with $US/gallon since we really need to know if the apocalypse is starting yet.

At the current exchange rate, one NZ dollar is 80c US. This means that (2.19 x 0.8) we are paying $1.75US a litre.

And one US gallon is 3.78 litres.

So, $1.75 x 3.78 = New Zealanders are paying US$6.62 (rounded) per gallon of petrol.

OK folks, crack out your chainsaws, the apocalypse has officially started in New Zealand.

As you're probably all aware, the price of petrol has all sorts of flow-on effects in day-to-day life, even on those who don't own a car. Petrol/oil going up causes transport costs to go up, causing commodity costs to go up and so on and so forth. And of course NZ being a country that relies on transport a great deal, being long, skinny and Far Far Away from everyone else, is kind of a slave to the price of petrol. Even the chainsaws we'll use to defend ourselves in the apocalypse use petrol*.

*cough* Anyway.. that's only two countries. What about the rest of the world?

The first site I looked at compares some countries in Indian rupees (with a handy $US converter at the bottom) in 2008. The most expensive in this one was Turkey at Rs113.30/litre (that's $10.13US a gallon). The UK, who have traditionally paid more for petrol than kiwis, were sitting at Rs95.50/litre ($8.54/gallon US). As usual, NZ didn't feature there. But that site's old, so..

Here's a convenient graphic, which actually has New Zealand on it.

Here's one from the UK as of December 2010. Again, NZ doesn't feature but thanks to my handy currency converter, I have gleaned that in the UK they were paying US$7.60/gallon, with Norway the highest at US$8.95/gallon.

And here's the wiki page, which has done all the work for me, actually includes New Zealand and was updated on the 11 of April. It shows that the most expensive petrol in the world is to be had in Turkey at US$9.69/gallon, followed by a bunch of European countries sitting around $8. The cheapest petrol in the world is in Venezuela at 9c followed by Saudi Arabia at 61c. Yes, that's per gallon. That Venezuela price is heavily subsidised by their government whereas European countries tend to tax petrol rather than subsidise it.

What have I learned from this?

Well it seems to me that the price of petrol to me the consumer has little to do with the vagaries of the oil market and a lot to do with the way the government handles taxing vs subsidising it. I'm assuming here that European governments are all for less petrol being used, where as the Venezuelan government perhaps wants to encourage industry and mobility therefore keeps the price low. But I'm just guessing. Also, have you noticed how the prices go up and down without any seeming relationship to the price of anything else? Go figure.


What I do know is that the price of petrol is always relative. I look at those tables and it seems the US has it pretty good. But I'm also aware that to the average person, it isn't about global comparisons, it's about relative prices. So if petrol goes up by 50c a litre (as it has here in the last 6 months), that has a big impact on the choices you make regarding mobility. But the bottom line is that lots of folks in the world spend a larger chunk of their pay packet at the pumps than they used to, and some countries are hit harder than others.

Which isn't exactly rocket science but it was nice to see for myself.

Anyway, in other news THREE MORE SLEEPS! And it seems the lecturer likes my topic if the mark for my proposal is anything to go by. She made some good suggestions as to how to make it better. Now I just have to find time to write it in between *CENSORED DUE TO EXPLICIT CONTENT*

* Yes, I'm equating the standard apocalypse with the zombie one. Although, maybe I shouldn't. The four horsemen probably don't fill up at Caltex, knowwhaddimean?

Comments:

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From:richdrich
Date:April 11th, 2011 09:54 pm (UTC)
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An interesting effect: the US has very little tax on petrol, which means that the price of crude makes up a substantial part of the cost. So if the price of oil doubles, the price of gas goes up by a much larger percentage than it does in countries with more petrol tax. Also, because fuel is cheap, they use more (thirsty cars, longer commutes, no public transport or cycling/walking options).

So a price rise is a bigger shock to a US budget than an NZ budget, and a smaller shock to a Londoner or Amsterdammer.

Also, see my scheme to fix prices for moderate quantities of petrol and tax larger amounts.
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From:thesecondcircle
Date:April 11th, 2011 10:19 pm (UTC)
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Indeed, many countries in the world use the money from petrol taxes to create/support public transportation. In the US, which is HUGE compared to much of Europe for example, there is relatively little public transportation. That means that for many people it's not that public transport is less convenient, but completely absent. There just isn't an alternative to driving. The upswing in the price of gas in the US is also driven by recently de-regulated speculation in our commodities market (cough cough, talk about not learning our lessons). That means that the prices of our gas and food and other necessary goods is affected by the actions of various rich bankers in suits.

That this is completely unsustainable, regressive, and downright punitive to the poor doesn't seem to phase our corporatocracy.

Here's my political advice for all other Nations. If the US thinks that something is a great economic idea, you should avoid it completely!
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From:tatjna
Date:April 11th, 2011 11:02 pm (UTC)
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Yeah, you can tell even from the wiki table that Unzud isn't as bad off as most other western countries. In fact your pretty graph follows the table pretty faithfully.

In the 1970s we had carless days. Ours was Tuesday. I didn't pay for petrol back then cos I was 8, and it's not surprising that other folks have trouble making that comparison.

Also, when I bought my first car, petrol was 83c a litre. At the same time, rent was about $80 a week, a postage stamp was 40c and 2L of milk was under $2.

In the intervening *mumble* years, my income's gone up by about 700%, my rent's gone up by about 400%, milk's gone up by about 250% and petrol's gone up by about 280%.

(i am not sure how many other people's incomes have gone up that much tbh)

And yes, Americans need to buy smaller cars. They also need to be able to afford them, since even in NZ it's cheaper to buy an old HQ than it is an economical hybrid.
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From:bekitty
Date:April 11th, 2011 11:25 pm (UTC)
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I was in Tennessee when the price of petrol went up to over $5 per gallon. The apocalypse didn't happen, and most people didn't stop driving. They just complained louder.
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From:tatjna
Date:April 11th, 2011 11:26 pm (UTC)
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The bleatocalypse?

The apocalypse didn't happen cos Sam n Dean averted it by driving around in their V8 Impala a lot.

*nod*
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From:rivet
Date:April 11th, 2011 11:30 pm (UTC)
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I'm really busy at work today, but ask me later about purchase price parity (PPP) caluculations
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From:ferrouswheel
Date:April 12th, 2011 12:25 am (UTC)

Re: Frivolous comment is frivolous

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I'll certainly be emoting when I arrive.

:-.
:-)
:-D
8-D
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From:ferrouswheel
Date:April 12th, 2011 12:25 am (UTC)
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To answer the original question. I think fish will become more expensive as we convert our motor fleet to run on fish oil.
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From:tatjna
Date:April 12th, 2011 01:09 am (UTC)
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Plz to not turn the sea kittens into oil!

only those nasty rocks mmk
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From:dreadbeard
Date:April 12th, 2011 05:03 am (UTC)
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Relatively speaking, when petrol spiked to over $2 last year or whenever, it became too expensive for me to justify maintaining a car on my budget at the time...
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From:danjite
Date:April 23rd, 2011 02:16 pm (UTC)
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While the price of running a personal car is the big gripe point in the US, the big danger is the cost of diesel for big trucks for shipping.

Since deregulation in the early 1980's the trucking "industry" has been running on thinner and thinner margins and is basically teetering on the edge, as the price to deliver goods has kept increasing but factors around deregulation in the industry has kept prices declining.

The US utterly relies on trucking for internal shipping.

Now, let us consider that a large portion of the US are urban-dwellers and urban food production in the US represents such a rounding error that pretty much 100% of food is imported from other regions.

As diesel fuel prices climb and climb, should food prices go up appropriately... but the trucking companies aren't getting more per mile for the shipping.

I shouldn't write these things in the middle of the night, but, well, eventually either the trucking industry collapses and the cities get no food or the trucking industry gets increases to cover costs and the
price of food to the masses skyrockets during a period of falling or stagnant income.

In a place where a significant number of people own personal handguns.

There is a potential for messiness.
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