Recently the CSIRO warned that the price of petrol could rise to $8 per litre within 10 years! In the past year alone we have already seen petrol prices jump nearly 20 percent. It is estimated that this is eating into the average family’s pay packet to the tune of more than $700 per year.
But it is not only our fuel bill that is increasing. Over the past few months we have also seen most products that are transported by road increase accordingly. This has been especially the case with food. Overall our pack packets are not keeping up with the rising costs of living.
The reasons for the petrol price increases are varied. Partly they are a result of the situation in Iraq and the instability in the Middle East. Far from paving the way for oil prices to decrease, the US led invasion has created even more instability in the region. With renewed threats now against Iran this is not expected to improve soon.
Another significant reason for the increases is the growing demand for oil in both China and India. With rapidly expanding economies the increases in the demand for oil is outstripping the potential of the oil industry to increase supply.
The reason the industry can’t keep up is because when you leave oil production up to big business (as with everything else) they tend not to spend money on investing in new infrastructure or technology. This has limited their capacity to increase production.
The big four oil companies of Shell, Mobil, BP and Caltex totally dominate the industry in Australia and are all making huge profits at the expense or ordinary people. Government taxes in the form of fuel excise only add insult to injury.
The Socialist Party calls for the big oil companies to be nationalised. On the basis of public ownership petrol prices could be significantly reduced as it would mean that these companies could be run for the benefit of ordinary people rather than for mega profits.
Not only that but, given the current environmental crisis, it is essential that we quickly develop a plan to make the transition from oil and fossil fuels to renewable technology. At the moment the big oil companies are resisting this tooth and nail because it will interfere with their profits.
One of the side effects of high petrol prices has been that thousands more people are now using public transport. This is a good thing as it reduces greenhouse gas emissions but unfortunately our under funded public transport systems have not been able to cope. This has led to massive overcrowding.
Alongside taking energy production out of the hands of big business and investing in renewable technology we need better public transport systems so that we are not totally relying on cars. All this points to the need for a socialist planned economy as an alternative to the chaos big business dominated capitalism.