A few weeks ago when I filled my car it cost nearly $120. I filled it last week for less than $100 and the price of fuel has fallen since then, and is predicted to fall more.
. . . Brent crude oil, the oil imported to New Zealand for petrol, was down US91c to US$56.42 a barrel on Friday on the back of continued concerns about a global supply glut.
Earlier in the day it had fallen to a post-2009 low of US$55.48, only half its average price of about US$110 a barrel between 2011 and 2013. . .
That reduction is as good as a pay rise or tax cut.
The benefit isn’t just the direct one of needing to spend less on fuel. There’s also the indirect benefit from a reduction in the cost of transporting goods.
Fuel is a significant cost on most farms and in many other businesses which will welcome the savings.
The government will get less in GST from fuel, but at least some of that will be offset by people spending money they would have spent on fuel on other things.
What does this mean for the theory of peak oil?
The price is a function of supply and demand and the lower price reflects a higher supply.