Mr Rudd's foolish mutterings during the election campaign to manage petrol prices may come back to haunt him. He didn't say 'control' but he did suggest that something needed to be done about them - the impression was unmistakeable. Mr Rudd's concern was to win a few votes from disgruntled consumers but this message was both misleading and inappropriate. He cannot do anything about petrol prices and, anyway, should not try.
The ACCC have again reported that nothing can be done about these prices - they reflect international marginal costs. While the local wholesaling industry that imports most of the fuels we use is highly concentrated there is no evidence of significant collusion. Margins are around only 4 cents per litre and, compared to other countries, government taxes are relatively low.
In one respect the ACCC findings are unusual. The findings did identify the unique Australian weekly cycle in petrol prices with trough prices being experienced on Tuesdays and peak prices on Thursdays. The difference between peak and trough prices is often 10 cents per litre - it is a large range with the majors adding about 8.7 cents per litre to prices each Wednesday.
These price cycle differences are so regular and so long standing that one might suspect a measure of collusion is occurring. One wonders for example why enterprising service stations don't corner the market on Thursdays by selling at a discount and having a relaxed Tuesday by charging premium prices then. I don't know the reason this does not occur and nor does the ACCC - the issue is a mystery. But the ACCC is convinced they do not reflect wholesaler collusion.
Like every other motorist I grimace at my monthly petrol bills and try to fill up my tank each Tuesday. But these high prices are steering things in the right direction - even if, by themselves they are less than completely adequate. We do need to develop alternatives to petroleum-driven transport and these are being developed in response to higher prices. We also need to make practical steps in our everyday lives to reduce greenhouse gas emissions. The prospect of 'peak oil' and an efficiently functioning forward-looking liquid fuels market is helping net to address climate change issues - even though by raising costs it reduces resources available to address climate change. The same cannot be said of coal use in electricity generation where scarcity is not an issue and where carbon taxes must be introduced to cut associated greenhouse gas and other pollution externalities.
I have an aging vehicle that is a petrol-guzzling hunk of rubbish - when it expires I will replace it with a more fuel efficient vehicle partly because of the financial incentives that drive my behaviour. This is as it should be.
I should, in fact, be facing the same incentives to change my use of greenhouse gas emitting electric power. We should accept the need for higher energy prices and the case for a conservation ethos.