What will happen when petrol hits $2 per litre
May 29th, 2008
There’s a better than even chance that petrol will hit $2 per litre before Christmas 2008. When that happens I believe we will see:
1. A rapid reduction in large 4WD vehicles on Australian roads. Sales of 4WDs are already falling and the swing to smaller, more cost efficient cars will be good for everyone. Scooter sales will skyrocket as will the number of accidents involving scooters.
2. An upsurge in people cycling to work. Bicycle sales are spiking as many people who live within 10 kms of their workplaces choose to cycle to work rather than drive. Public transport will not be able to cope with the demand.
3. Increases in food prices. Oil is a major cost in food production. Fertiliser, farm equipment and food transport all consume oil. The increased use of farming capacity for bio-fules will also put pressure on food prices.
4. A jump in inner-city residential property prices. Houses and units within 5 kms of CBDs will enjoy a better than average market increase not withstanding interest rate changes. If it costs a commuter an extra $50 per week to get to work, paying an extra $50 - 100k for a residence closer to the city may be a good investment.
5. The Labor government will continue to lose it’s lustre as voters learn that they are no better than the other mob and that the iconic “working family” is now $65 a week worse off than when they were dealing with a Howard government.
6. Tourism and hotels will suffer. As jet fuel prices hit record highs, business and recreational travel will be cut causing a knock-on effect in hospitality and tourism related industries. Companies like Qantas will be squeezed between increased wage demands from criticial skills workers (pilots and engineers), and jetfuel prices. There will be strikes in the airline industry.
7. More and more businesses will introduce fuel surcharges as fuel becomes a higher proportion of their input costs. ASIC will try to crack down on this trend. Airlines and freight companies already have a fuel surcharge arguing that it’s easier to add a surcharge than constantly review and change prices with rises in fuel costs. Call-out fees for plumbers and other tradespeople will start to include a fuel surcharge.
8. Truckies will become politically active. Remember the truck blockades of the early late seventies and early eighties ? Private truck operators will come under enormous financial pressure and blame the government for the cost of diesel fuel. Don’t be surprised if there are wildcat strikes and blockades. The use of SMS and the Internet will mean that these blockades will be much better organised and more effective.
9. Businesses will come under pressure to allow people to work from home. I’m guessing here, but I suspect 20% of workers could probably be just as productive if they worked one day a week from home. It’s pretty easy to divert a telephone and Internet connectivity allows many people to perform their work tasks from just about anywhere. It would be interesting to see State and Federal governments lead the way with this concept. One day a week working from home means a 20% reduction in fuel costs and less traffic congestion.
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Categories: Opinion |
