Snippet: Kiss goodbye to petrol at $1.10 or less

I think I can safely say that the days of ULP (91 RON standard unleaded petrol) being available at $1.10 per litre (sometimes less) are well and truly behind us. With OPEC deciding to cut back world-wide supplies by 10 percent in order to force the west to use up their massive stocks of crude; and then other crude producing nations getting in on the plan and also cutting back, the barrel cost of crude is going to gradually climb up.

 Add to this the impact of the falling Australian dollar, which also causes the price of imported petroleum products—which is about 90 percent of them—to head north.

 While we initially notice the impact of higher petrol prices when we fill up our cars, this cost will flow through to almost everything. Because almost everything we use in the western world needs oil products to get it to us. This includes planting, harvesting, transporting, refining, processing, heating, cooling, etc., etc. If crude continues to climb then you can expect to see the flow through in food prices in 2017—as if the cost of food has not already increased enough through 2016 due to other causes.

 The increased cost of oil-based products will also further negatively impact the mining industry, which directly and indirectly uses diesel fuel by the tonne.