Price of Petrol

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#2107270 13-Oct-2018 15:13

Thanks for that chart Fred99. Brings things into perspective a bit. I find it intriguing that Mexico sits right on the Gulf of Mexico yet has such high pre tax fuel prices. Maybe they should rename that piece of water, since they don't benefit from it as much as their northern neighbour.
I heard an international commentator note that "Americans can't understand why their oil is stuck under Arab sand". True of Mexican water as well I guess.

And I'm sure is not exploring for our own oil and gas in the future will mean we will be sold other country's product at a discount for being such great international citizens :-/

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Linuxluver

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#2107492 14-Oct-2018 00:19

Dingbatt: Thanks for that chart Fred99. Brings things into perspective a bit. I find it intriguing that Mexico sits right on the Gulf of Mexico yet has such high pre tax fuel prices. Maybe they should rename that piece of water, since they don't benefit from it as much as their northern neighbour.
I heard an international commentator note that "Americans can't understand why their oil is stuck under Arab sand". True of Mexican water as well I guess.

And I'm sure is not exploring for our own oil and gas in the future will mean we will be sold other country's product at a discount for being such great international citizens :-/

We spend $6.8 billion each year on imported fuel.

Our trade deficit is $4 billion a year.

Do the math.

If we stop using imported fossil fuels and use local electricity instead.....NZ goes from being a debtor nation to a country with money to spare.

Even if you don't believe in climate change......moving away from fossil fuels ASAP makes economic sense from every other angle.

If you look at it that way, the government could 'invest' that $2.8 billion trade surplus now and start buying EVs and giving them to people for free......That would be 56,000 new EVs every year for an average $50,000 each.

Even better.....invest in conversion at $30k / vehicle and they could do 93,350 EVs every year.......for free. so no problem for people getting them.

If people paid at least half, then double the number of cars.

After 5 years our imported fuel bill would be far lower......and we'd be well into surplus.

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jarledb

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#2107495 14-Oct-2018 00:58

Is it Trump that has convinced you that a trade deficit is the same as losing money?

The NZ state does not lose money because people in New Zealand buy more products from abroad than NZ businesses sell for export.

That said, nothing wrong with reducing the dependence on oil/gas and getting more EVs on the roads. But the trade deficit is not one of the reasons why its important.

New York Times has a good article that might help to understand what a trade deficit is and isn´t.

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Bluntj

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#2107561 14-Oct-2018 09:29

How many people can really afford to purchase a new EV, subsidised or not? If 10% of NZ splashed out on new EV's in a single year the second hand car market will take a tumble.

EV's are really for the wealthier kiwi's who can easily afford a few extra dollars per week on petrol anyway.

As always its the poorer kiwi's that get left behind in the dust.

quickymart

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#2107725 14-Oct-2018 18:52

I don't think the price of petrol cars would plummet that much though, would it? If the dealer bought the car for $10000 (for example) when petrol prices were lower, they won't suddenly make it $5000 to get it off the yard, would they (as nice as that would be)?

JimmyH

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#2107777 14-Oct-2018 20:54

Linuxluver:

If we stop using imported fossil fuels and use local electricity instead.....NZ goes from being a debtor nation to a country with money to spare.

It doesn't work that way. The trade balance is (mathematically) the mirror image of NZ's net savings shortfall. To get a trade surplus we either have to earn more and/or consume less (= increase savings). Unless we did one of these two things, what would happen is the dollar would likely rise until the trade deficit was restored.

Linuxluver:

If you look at it that way, the government could 'invest' that $2.8 billion trade surplus now and start buying EVs and giving them to people for free......That would be 56,000 new EVs every year for an average $50,000 each.

Again, it doesn't work that way. We have a floating currency. The government doesn't fund our trade deficit, nor does it magically get a trade surplus deposited in it's bank account. So even if we went into surplus, that doesn't mean that the government magically gets the money to invest.

Bluntj:

How many people can really afford to purchase a new EV, subsidised or not? If 10% of NZ splashed out on new EV's in a single year the second hand car market will take a tumble.

EV's are really for the wealthier kiwi's who can easily afford a few extra dollars per week on petrol anyway.

As always its the poorer kiwi's that get left behind in the dust.

That's the way of any new technology. It starts out expensive and affordable by the well heeled, and then becomes more accessible and affordable as manufacturers innovate, move to mass production, and drive down costs. We saw it with air travel, radios, TVs, cars, washing machines, refrigerators, and computers. There is no reason to expect EVs to be any different.

Linuxluver

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#2107803 14-Oct-2018 21:42

jarledb:

Is it Trump that has convinced you that a trade deficit is the same as losing money?

The NZ state does not lose money because people in New Zealand buy more products from abroad than NZ businesses sell for export.

That said, nothing wrong with reducing the dependence on oil/gas and getting more EVs on the roads. But the trade deficit is not one of the reasons why its important.

New York Times has a good article that might help to understand what a trade deficit is and isn´t.

A trade deficit devalues your currency as your terms of trade are less favourable. You want to buy more from the world than the world wants to buy from you.

We'd all like a dollar with a bit more oomph.

There's also that "flow of capital" thing that US takes for granted. We can't take that for granted at all. We need to buy the forex to buy other people's stuff....and that can mean borrowing it if we don't have it on hand.

The $2 million for the car vs the $1 million for the bananas example glosses over the currency issue. How did the $1 million for the bananas become $2 million to buy the cars? They don't say.

That's the issue right there. We're not the US and our currency isn't the US$. Most of this NY Times article rests on the US$ as global currency.

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Linuxluver

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#2107813 14-Oct-2018 22:00

Bluntj:

How many people can really afford to purchase a new EV, subsidised or not? If 10% of NZ splashed out on new EV's in a single year the second hand car market will take a tumble.

EV's are really for the wealthier kiwi's who can easily afford a few extra dollars per week on petrol anyway.

As always its the poorer kiwi's that get left behind in the dust.

If the incentives are right, it will be at least the same number of people who can buy new cars of any kind.

The idea of the incentives is to bridge the price gap until economies of scale in manufacturing even things out. It's inevitable EVs will be cheaper to make because they are so much simpler and literally have several thousand fewer parts than dino-burners.

I don't know what to do about poorer Kiwis. I read a study yesterday that was looking at people who switch power companies to get the best deals on electricity. By far, the people who failed to switch were the least well off.....and there is NO economic barrier to switching....only upside. Switching is free.

So why don't they save money when it's free to do so?

I can only guess they just aren't thinking about it......and that may have something to do with the wider picture of why they are poor in the first place. Just not thinking about stuff.

I'm all for just buying an EV....and LED light bulbs. Set them up. let them save more of what little money the have.

It will work out cheaper for everyone in the long run. I know some people don't believe that.....but the research shows that being poor keeps people poor. So stop it.

As for wealthy people owning EVs, it's just not true. I know people on very limited incomes who have financed themselves into a $12,000 EV and they use the money saved on petrol - a lot - to pay the loan. They are not far off being "poor"....but they are being clever about what they spend their money on.

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Linuxluver

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#2107814 14-Oct-2018 22:04

JimmyH:

Linuxluver:

If we stop using imported fossil fuels and use local electricity instead.....NZ goes from being a debtor nation to a country with money to spare.

It doesn't work that way. The trade balance is (mathematically) the mirror image of NZ's net savings shortfall. To get a trade surplus we either have to earn more and/or consume less (= increase savings). Unless we did one of these two things, what would happen is the dollar would likely rise until the trade deficit was restored.

Linuxluver:

If you look at it that way, the government could 'invest' that $2.8 billion trade surplus now and start buying EVs and giving them to people for free......That would be 56,000 new EVs every year for an average $50,000 each.

Again, it doesn't work that way. We have a floating currency. The government doesn't fund our trade deficit, nor does it magically get a trade surplus deposited in it's bank account. So even if we went into surplus, that doesn't mean that the government magically gets the money to invest.

Bluntj:

How many people can really afford to purchase a new EV, subsidised or not? If 10% of NZ splashed out on new EV's in a single year the second hand car market will take a tumble.

EV's are really for the wealthier kiwi's who can easily afford a few extra dollars per week on petrol anyway.

As always its the poorer kiwi's that get left behind in the dust.

That's the way of any new technology. It starts out expensive and affordable by the well heeled, and then becomes more accessible and affordable as manufacturers innovate, move to mass production, and drive down costs. We saw it with air travel, radios, TVs, cars, washing machines, refrigerators, and computers. There is no reason to expect EVs to be any different.

I hear you. I didn't want to go into all the mechanics of it unless someone raised it...and you have.

The main thing is.....if we have better terms of trade then our currency is more sought after....and its value would tend to rise. That gives is all more buying power. We are all better off.

So removing the need to buy the US$ equivalent of NZ$6.8 billion to pay for the imported fuels would have an affect on the value of the NZ$....and we would find out debts to the world are easier to pay and we can buy that cool imported things for a lot less than today.

Underneath it all the climate change thing. We have about 12 years to really make a change, or we're all screwed. This will mean looking past the usual petty class jealousies and failed economic models many of our brains are locked into and instead deal directly and practically with the sources of emissions. Now. Tomorrow.

The ideology being used to object to this is the very same one that has caused the problem. The need to move on from it will be mentally painful for a lot people....especially those in business, banking and investment. All their "truthes" aren't true anymore if we want to have a habitable planet in 50 years.

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Geektastic

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#2107826 14-Oct-2018 23:01

Bluntj:

How many people can really afford to purchase a new EV, subsidised or not? If 10% of NZ splashed out on new EV's in a single year the second hand car market will take a tumble.

EV's are really for the wealthier kiwi's who can easily afford a few extra dollars per week on petrol anyway.

As always its the poorer kiwi's that get left behind in the dust.

Also, there are still plenty of people for whom the current EV's do not cater. If you are a farmer, a rural resident, live in the mountains and have annual snow etc etc then the current vehicles are of little use. If you use your vehicle for long trips during which stopping for 10 or 15 minutes for fuel is fine, but stopping for some number of hours to charge a battery is not fine, then they are mostly no use to you either.

I posted earlier about the economics of buying a decent ebike (up to $8500 they can be!) vs buying petrol. Even at $3/l I can use my Range Rover for years and years before the bike is cheaper than the fuel in terms of local driving (and of course the bike is no use at all for long distance travel unless you have spare weeks).

Hammerer

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#2107828 14-Oct-2018 23:04

Linuxluver:

I hear you. I didn't want to go into all the mechanics of it unless someone raised it...and you have.

The main thing is.....if we have better terms of trade then our currency is more sought after....and its value would tend to rise. That gives is all more buying power. We are all better off.

So removing the need to buy the US$ equivalent of NZ$6.8 billion to pay for the imported fuels would have an affect on the value of the NZ$....and we would find out debts to the world are easier to pay and we can buy that cool imported things for a lot less than today.

Underneath it all the climate change thing. We have about 12 years to really make a change, or we're all screwed. This will mean looking past the usual petty class jealousies and failed economic models many of our brains are locked into and instead deal directly and practically with the sources of emissions. Now. Tomorrow.

The ideology being used to object to this is the very same one that has caused the problem. The need to move on from it will be mentally painful for a lot people....especially those in business, banking and investment. All their "truthes" aren't true anymore if we want to have a habitable planet in 50 years.

It all sounds too simplistic to be "all the mechanics of it" and it seems too polemic to be credible. Here's just a few examples: there are costs to an appreciating NZ dollar, as was already pointed out, so its not the great upside you present; fearmongering of the sort you are promoting generally increases economic costs in at least the short to medium term; there doesn't appear to be one ideology being used by those you disagree with; and some of 'their "truths"' will almost certainly still be true even if you don't agree with them.

It sounds good replacing 56,000 vehicles a year but how many years will it take to replace the existing fleet?

mattwnz

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#2107853 14-Oct-2018 23:28

I suspect if everyone switched to an EV tomorrow, NZ wouldn't have enough power generation to cope with the demand. Am I right, has there been any analysis into this? Even if it occurred over 10 years, I suspect we would have the same problem, especially if we continue with the record incoming immigration we have had over recent years.i

SaltyNZ

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#2107895 15-Oct-2018 07:04

mattwnz:

I suspect if everyone switched to an EV tomorrow, NZ wouldn't have enough power generation to cope with the demand. Am I right, has there been any analysis into this? Even if it occurred over 10 years, I suspect we would have the same problem, especially if we continue with the record incoming immigration we have had over recent years.i

You would be right, but as pointed out earlier somewhere in this very same thread, the same magic wand that gives everyone an EV tomorrow would also magically fix the generation and distribution issue. Which is to say, yes they are intertwined, but generation and distribution companies are in the business of making profits out of generation and distribution. As demand rises because of EVs, they'll put on more capacity for more profits.

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zenourn

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#2107937 15-Oct-2018 09:08

Geektastic:

Also, there are still plenty of people for whom the current EV's do not cater. If you are a farmer, a rural resident, live in the mountains and have annual snow etc etc then the current vehicles are of little use. If you use your vehicle for long trips during which stopping for 10 or 15 minutes for fuel is fine, but stopping for some number of hours to charge a battery is not fine, then they are mostly no use to you either.

I agree that there are cases that current EVs don't cater for, but being a rural resident isn't necessarily one! I am a rural resident and our 24 kWh Leaf is fantastic for all the trips we have to do and does ~2500 km/month.

Also, charge stops are generally on the order of 10-20 minutes at fast charges rather than hours, and I find them great for a little break.

SaltyNZ

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#2107951 15-Oct-2018 09:31

zenourn:

Geektastic:

Also, there are still plenty of people for whom the current EV's do not cater. If you are a farmer, a rural resident, live in the mountains and have annual snow etc etc then the current vehicles are of little use. If you use your vehicle for long trips during which stopping for 10 or 15 minutes for fuel is fine, but stopping for some number of hours to charge a battery is not fine, then they are mostly no use to you either.

I agree that there are cases that current EVs don't cater for, but being a rural resident isn't necessarily one! I am a rural resident and our 24 kWh Leaf is fantastic for all the trips we have to do and does ~2500 km/month.

Also, charge stops are generally on the order of 10-20 minutes at fast charges rather than hours, and I find them great for a little break.

I am also a rural resident, and I commute 55km each way every day. In fact, the last FtF survey shows average annual km travelled by EV owners. They mention one 30kWh Nissan Leaf is on track for 46,000km/year - I think that might be me, although my monthly km do vary a bit depending on what else is going on.

As a general rule, I just plug in to a power point in the garage when I get home - I don't have to public charge that often.

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