Who would have thought 5 years ago that we would be paying $1.50 per litre at the petrol station? I certainly wouldn’t have. Gone are the days that a station was selling fuel for $0.98/L. How I wish those prices would come back! But times have changed, and so have prices. Now the average national petrol price is at $1.43 per litre, and it doesn’t look to be decreasing any time soon.
We all rely on fuel in one way or another. These are just a few areas that the price rise has an effect on:
Some households are now spending up to $200 a month on fuel per vehicle, which is up $25 in the last 4 months. Most households have more then 1 car! Sure, $25 might not seem that much, but over the course of a year, that’s $300. Almost another 2 months worth of petrol! And if the carbon tax goes ahead, the opposition says that it could add another 6.5c to the litre. It can’t not have an effect on the average person’s/family’s budget.
This leads us to the medium and long term effects which could impact businesses. If employees are going to be paying more to get to work, they might look to get compensation for these higher prices through increased wages and reimbursement. Could this lead to another kind of cycle starting?
It will also have a huge impact on companies with fleets. If it’s around $200 per month to fill only 1 vehicle, just imagine the affect it will have on those companies with anything over 20 vehicles! This may require cuts somewhere else in the business, which would then in turn have a knock on effect. The cycle then continues.
Certain industries might also feel the brunt of the higher petrol prices. If people are spending more on fuel, they have a lower disposable income, meaning they have to cut something else out of their spending. This can have a roll on effect to other industries, and the first to be hit will most likely be retail.
"People have a weekly cost for spending areas such as this, and there's not
much left over if petrol prices keep increasing. There's not much left for
discretionary retail." Shane Oliver, AMP Capital Investors
What you can do to soften the blow
Unfortunately there is not a lot we can do about the rise in price, as petrol something most people find a necessity these day. However, here are a few things you can do in the meantime to make your fuel go that extra mile.
Have you felt the brunt of the rising petrol prices?
What are some of your fuel saving tips?
Share with us below.