August 15, 2012

Real petrol prices

From Stuff

BP spokesman Jonty Mills said as prices neared uncharted territory it was likely demand would drop. The outlook for prices remained volatile, he said.

An Automobile Association spokesman, Mark Stockdale, said prices were now “perilously close” to a record, which typically prompted a review of driving options and habits.

As usual this is talking about nominal prices, not inflation-adjusted, so the real prices aren’t really as ‘perilously close’ to a record as all that.  Dividing the StatsNZ petrol price index by CPI we get:

Prices are much lower than in 1985,  and still safely below the more recent 2008 peak.  The record that is in peril is the little wiggle in prices from last year.

On the other hand, prices are up at the levels of the 1980s (though with much cheaper cars), so driving really is getting more expensive.  A “review of driving options and habits” might be a good idea

 

 

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Thomas Lumley (@tslumley) is Professor of Biostatistics at the University of Auckland. His research interests include semiparametric models, survey sampling, statistical computing, foundations of statistics, and whatever methodological problems his medical collaborators come up with. He also blogs at Biased and Inefficient See all posts by Thomas Lumley »

Comments

  • avatar

    I’ll quibble about driving being more expensive. Petrol is about as expensive as it was in the early 80s. But improvements in efficiency (fewer litres per 100 km) have surely made driving cheaper in total.

    12 years ago

  • avatar
    Thomas Lumley

    Yeah, though from what long-time New Zealanders tell me, the car prices before deregulation were an even bigger difference.

    12 years ago

    • avatar

      Definitely. The old system had a few nice rorts built into it. From the oral history here at Canterbury, a former member of the Economics Department (now deceased) would always bring a car back to NZ with him when he went for sabbatical abroad, selling it soon after for considerable profit. As much as he railed against capitalism, he didn’t seem averse to profiting from the regulations where he could.

      12 years ago

  • avatar

    I recently visited Canada. They are pausing plans to expand Alberta oil sands exploitation because oil prices are so low.

    12 years ago