While there is some possibility that oil companies and petrol stations can raise their prices without warning in an opportunistic manner, I think it must now be obvious that the basic supply and demand law of economics is the real concern here.
The world demand for oil now exceeds supply, the phenomenon known as "peak oil". So the price is going up.
As oil supplies dwindle and demand continues to increase (e.g. from China, India and other growing economies) then the price will continue to rise.
How high? Well, I can imagine that $2.00 per litre could be reached by the end of 2009, and a $5.00 per litre is possible by 2012. When will it reach $10.00 a litre, perhaps by 2020.
In Europe (e.g. Norway and Italy), the price is over $2.20 per litre already. In the United States, where Hummers and 8 litre V8s are still bought, the price is currently $0.70 per litre.
Petrol 9(and other fossil fuel) price rises will have dramatic effect on our lifestyles and our economy. Fossil fuels such as petrol, diesel, LGP and CNG (which is more abundant) are used heavily for food growing, transport and distribution. Private cars using fossil fuels are used heavily for personal transport, often for simple commuting to and from work.
So the price of food and transport will rise dramatically in coming years unless governments take action to put policies in place to shift towards alternative renewable energy sources for food production and transport and indeed to fabric of our society.
Unfortunately the current state of play in Australia is not good, as per the following:
- Freeways and roads are being built rather than rail and cycling infrastructure
- CNG is being shipped overseas rather than used locally, and no effective CNG refuelling infrastructure is in place
- Many thousands of trucks (mostly diesel) are used daily for goods and food transport, including thousands doing routine trips such as along the Melbourne Sydney route
- Their is no significant low emissions and/or hybrid car manufacturing in Australia; the Ford and General Motors plants are still focussed on building six and eight cylinder cars (such as the new GM ute for export to the United States, and Governments are still buying them for their car fleets.
For the record, I drive a 1993 Mitusbishi 4WD van, which I bought as the 2.5 litre motor uses half the fuel of a comparable 6 cyclinder 4WD. I also ride my bike a lot.
Making green cars is a good option.