[Peakoil] today's editorial in Canberra Times

[Jenny Goldie]

BlankCanberrans wary of oil profiteering 
The Canberra Times
February 22, 2012 
The global oil market abhors any uncertainty around supply, and rising tensions in the Persian Gulf resulting from Iran's nuclear ambitions, combined with a sanction imposed by Iran on shipments to Britain and France, have helped push crude prices to $US120 a barrel this week, their highest level for eight months. Indeed, the last time prices reached this level was when Libya was engulfed in civil strife last year.

Iran is a big oil producer, but nowhere near as significant as Saudi Arabia and Russia or even the United States, and it supplies only limited quantities to Britain and France. But then the international oil market is not known for its steady nerve or sense of proportion. Logic would suggest that prices will drop back somewhat once the northern hemisphere winter ends, providing of course that Israel refrains from attacking nuclear targets in Iran. But other factors, such as China's steadily increasing appetite for oil and the decline of reserves in established oil fields suggests the decline may not be as large as many would like.

This is potentially bad news for Europe and the United States, struggling as they are to overcome varying degrees of economic stagnation and high unemployment. A prolonged period of high fuel prices would add to that mix the unwelcome possibility of stagflation.

Australia, a country increasingly dependent on imported crude oil, also faces the risk of increased inflation if oil prices remain at or around $120 a barrel. A strong Australian dollar has helped ameliorate price rises in the past year, but even so, petrol is edging toward $1.50 a litre in many state capitals, with Canberra closest to that mark.

There appears to be little economic rationale for Canberrans having to pay petrol prices that are equivalent to those charged in Hobart, where all fuel has to be imported from refineries in Victoria, and this has led to speculation that the oil companies servicing the ACT charge what the market will bear safe in the knowledge that retail competition here is weaker than elsewhere in NSW. As unwelcome as these prices are, Canberrans can take some comfort in the fact that commuting distances here are, on average, less than those in Sydney, Brisbane or Melbourne, and that this contributes to lower average fuel use. Even so, many Canberrans will take a lot of convincing that they are not the victims of profiteering by oil companies.



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