'People becoming desensitised to petrol price'

BusinessDesk: Kiwis lured back to big-engine cars, Turners Auctions says

22nd Feb 12, 1:53pm by BusinessDesk

Rising petrol prices haven’t stopped New Zealanders purchasing larger-engine cars, according to the latest sales figures from Turners Auctions.

Sales of vehicles with engines over 2.0L rose 4 percent in the fourth quarter, making up 48 percent of total vehicles sold. The average price for larger cars increased 7 percent in 2011 to $11,185, the highest since 2008.

“People are becoming desensitised to the price of fuel these days,” said Graham Roberts, chief executive at Turners Actions. “It seems the slow increase in the price of petrol has allowed consumers to accept the price.”

“As long as prices remain steady we expect people to continue to buy large-engine cars but our statistics show that dramatic petrol price increases decrease the value and the number of large vehicles sold,” Roberts said.

Shares of Turners Auctions rose 1.4 percent to $1.48 on the NZX today.

In line with the increase in sales of larger vehicles, the Holden Commodore has overtaken the compact Toyota Corolla as the highest-selling vehicle. Four out of the five most popular models purchased remain large-engine cars, including the Ford Falcon, Subaru Legacy and Ford Mondeo.

New vehicles sold

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Source: NZTA

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41 Comments

by Wolly | 22nd Feb 12, 2:45pm 1329875127

Big deal, it does not stop the loot leaving the country...loot that might have been spent on Kiwi made stuff....who cares.

by Andrewj | 22nd Feb 12, 3:18pm 1329877096

Not much leaves the country Wally most goes straight to government

http://www.aa.co.nz/motoring/owning-a-car/petrolwatch/how-petrol-prices…

Typically, around 40% of the pump price is the actual cost of refined petrol and up to half is tax i.e. 59.13 cents per litre in fixed excise, plus the Emissions Trading Scheme levy (3c/l) and GST

by scotty | 22nd Feb 12, 11:35pm 1329906937

Our Petrol tax here is pritty low compaired to most of the OECD.

http://i995.photobucket.com/albums/af80/Scozzax/Capture.jpg

It dosn't even cover the cost of building and maintaining our road network. A lot of roading money comes from rates and general taxes.

by Chairman Moa | 22nd Feb 12, 2:54pm 1329875646

Not desensitised... big cars are going dirt cheap so it's making sense to buy them and bear the petrol cost. When I left for Australia I sold my 2006, 6 cyl car, low mileage - all I got was $7000 after 3 weeks on trademe. A similar Corolla/civic of the same year will be at least $14000. On average my big car did 11.6L/100km combined driving – the corolla 8L/100km. An average 250km week – that is $15 more expensive on the big car (or $790/year) – So it might better to buy big, late model car on such small initial outlay and a little more in running cost will work out better on the long run

by Chairman Moa | 22nd Feb 12, 4:36pm 1329881768

Buying a car as an investment! who's the fool? It's an expense.

PS. ever try to fit 3 kids into a Corola size car? Mine next car will be the next generation Falcon XR - 4cyl turbo has it all...

by scotty | 22nd Feb 12, 11:54pm 1329908096

"ever try to fit 3 kids into a Corola size car" No, But my corolla held me plus 3 adults and their international travel gear (and I only have the hatchback version). My brothers corolla wagon was more usefull when moving than my dads midsize SUV. (the corolla can't tow our 1500kg boat though)

by Philly | 22nd Feb 12, 4:56pm 1329883006

Bloody stupid.

NZ doesn't pay its way in the world, it runs a chronic current accout deficit.

We should increase the tax on petrol, which is so low at present that we have one of the cheapest petrol prices in the OECD. The tax gained could reduce our fiscal deficit

Graduated Regos for cars, where larger cars pay double that of smaller cars, would also send a clear message - as it does in most countries.

As it is, when a crisis hits the Gulf, we will be incredibly vulnerable.

Crazy country

Cheers

by Chairman Moa | 22nd Feb 12, 5:09pm 1329883784

More tax on petrol - bloody stupid alright!

start digging we got some of that stuffs too...

And remember only thing that comes into 2 litre package or less is orange juice (and milk)

by Philly | 22nd Feb 12, 5:16pm 1329884167

Moa: your comments are fairly indicative of the level of reasoning (if you can call it that) that is usual in NZ, & leads to our addiction to ridiculously large vehicles.

cheers

by Chairman Moa | 22nd Feb 12, 5:06pm 1329883608

My current car is a Holden Cruze... ok not quite the real McCoy but the bedge said Holden. I am a leg in each camp!

by Matt in Auck | 22nd Feb 12, 5:28pm 1329884904

I've got a cruze too Moa!

What do you think of it?

by Chairman Moa | 22nd Feb 12, 5:43pm 1329885798

I quite like it, only 1.8, cheap as chip to run and it takes E10. A bit cramp in the back if I have more than 2 rowdy 9 yrs old. I bought it at QLD Govt Auction, paid bxggered all for it..

by Matt in Auck | 22nd Feb 12, 7:08pm 1329890891

those govt auctions are great

by David B | 22nd Feb 12, 5:16pm 1329884165

While I can't comment on what other New Zealanders are doing in terms of their car purchases and what this may be saying about their stance on petrol prices, when, with my own car, I routinely get 50 miles to the imperial gallon, (5.6L/ 100kms) what do I care about petrol prices?

What do you get with your SUV, Steven?

by noponies | 22nd Feb 12, 8:38pm 1329896322

Toyota Echo? I've got one, and get that mileage. All my mates think I'm a chump, but it costs me half as much as it costs them to travel the same distance..

by Philly | 23rd Feb 12, 7:54am 1329936880

noponies: Ah yes, but what happens if you happen to clonk into them on the open road? Then its sweet as for your mates, but sayonara for noponies!

This is a the reasoning of a lot of SUV drivers. NZ's implicit encouragement of larger vehicles has led to an arms race in the car market, competing to have the biggest vehicle - for safety as well as the (supposed) prestige of driving the biggest & ugliest truck on the road

Cheers

by skudiv | 22nd Feb 12, 7:34pm 1329892485

Oil is only $105, the exchange rate is 83c+ has been high for a while. Why is fuel still at record highs? Same type of rationale the banks use when they say that the OCR doesn't effect floating rates?

by andyh | 22nd Feb 12, 9:34pm 1329899680

The oil price you are quoting is for West Texas Intermediate - this reflects the price of oil in the US gulf/midwest. In recent years this price (which is still stupidly quoted by the media as the main crude bench mark) has become disconected from the 'real' price of crude (ie almost every other crude produced) because of a localised glut of oil as a consequence of Canadian tar sands oil being pumped down to Cushing (and being stranded with a limited market) where the WTI oil is refined.

In Australasia we work off Tapis crude (which in turn is much more heavily influenced by Brent). The price of Tapis is near a 10 month high of $US128. Brent is at US$120. Nearly every other crude produced globally is currently priced way above the USS105 that WTI is being quoted at. For example the OPEC crude oil basket (the average of the oil they produce) is $US119.

Thats why petrol is only 8c off its high in NZ. And if the NZ$ wasnt so high petrol prices would be a LOT higher.

by David B | 22nd Feb 12, 10:38pm 1329903510

That's right! Skudiv, you complete idiot! Why are you quoting the price of West Texas intermediate crude for? We all know that's not the real price of oil. What are you trying to do? Who cares what the Texans are paying! Their price is a localised glut! We all know that they are on the left side of the upward facing downwards sloop of the poultry curve. It’s exponential maths and you can’t argue with the physics! I’ve been to lectures on this! Good god, man, what sort of an imbecile are you? What you should be quoting is the real price of oil, and that is North Dakota Sweet. (US $83/b). Now that's the real price of oil. It's just like that loaf of bread and the 2L of milk I brought the other day at Countdown. Everybody knows that what we pay for them isn't the real price of bread and milk, so we shouldn't even mention what we do pay because that would be totally misleading, as what we pay is different to the rest of the world, so what we do pay isn't really what we pay because it isn't really the real price, so we didn't pay it then, did we? I do hope I’ve cleared that up and put you on the right track?

http://crudeoilpostings.semgroupcorp.com/

by Plutocracy | 23rd Feb 12, 8:01am 1329937318

Why are we even discussing oil price? I know for a fact there is a new technology being looked into that will render oil redundant and energy freely available. Trust me, I may appear to be scientifically illiterate but I know for sure that energy will soon be cheaper and more abundant then it ever was before. Resource depletion, much like the laws of thermodynamics are just another a leftie scam to hide the truth energy can be created for free from nothing.

But hey, don't dare ask me what this new technology is, it should be so obvious I will not reply!

by andyh | 23rd Feb 12, 8:11am 1329937883

Brilliant plutocracy!

The 'scientifically illiterate' bit seems especially true!

by ergo99 | 23rd Feb 12, 8:53am 1329940403

Will my 1962, big block v8 run on it,,,lol...I am proud of my size 13 carbon footprint...

by steven | 23rd Feb 12, 9:10am 1329941422

Nice one.....

regards

by andyh | 23rd Feb 12, 8:25am 1329938755

And your point is?

Why WTI is becoming irrelelevent:

http://www.investmentu.com/2011/February/wti-crude-oil-contract-losing-…

http://www.calgaryherald.com/business/crude+benchmark+irrelevant+synthe…

http://seekingalpha.com/article/260232-the-crack-spread-theoretical-oil…

http://tradeforecast.biz/en/usefull/119-stock-market/17782-stock-market…

and another one (there are plenty out there)

http://www.bloomberg.com/news/2010-09-23/west-texas-crude-losing-status…

And as I pointed out oil prices in Australasia ARE set largely from Tapis prices. Or are you going to tell me something different? Which answers the original question posed

You merely show your ignorance when you comment on something you obviously know nothing about David. I sense as you continue to lose the arguement on all things energy related a sense of desperation is creeping in.

by skudiv | 23rd Feb 12, 8:37am 1329939479

Awesome post!

by goNZ | 22nd Feb 12, 11:47pm 1329907623

NZ Refining to spend $425M on Marsden Point upgrade....

oh bother said the Peak Oilists

by andyh | 23rd Feb 12, 8:30am 1329939041

You'll have to explain how the fact that NZ only oil refinery is being retooled to make it more efficient tells us anything about peakoil?

Seriously you peakoil denialists are scraping the bottom of the barrel for things to say arent you? (boom boom)

Just as an aside oil refineries in both Europe and the US have recently been closed.

http://www.guardian.co.uk/commentisfree/2012/jan/25/crisis-european-ref…

by powerdownkiwi | 23rd Feb 12, 8:37am 1329939470

Andy - you'll have seen the graph of coal taking over from oil, globally?

The track is straight up, as you'd expect when it is displacing as well as self-increasing. Interesting to sketch in the peak; I sense it'll be no plateau.

The Concorde no longer flies, the Shuttles are history , and we're going back to coal. Oh, but we're growing.

You guessed/know who DavidB is/was? Raises interesting questions about integrity.

by andyh | 23rd Feb 12, 8:50am 1329940240

Some embittered minor ex- functionary from the National Party perhaps? A former town clerk from Timaru? I confess I havent given it much thought.

by ergo99 | 23rd Feb 12, 8:57am 1329940660

Cool,,, more clues required for me,,,,

by ergo99 | 23rd Feb 12, 8:57am 1329940667

Cool,,, more clues required for me,,,,

by steven | 23rd Feb 12, 9:15am 1329941743

No, do tell...he obviously knows nothing about a lot, especially science/engineering/economics/geology/maths/logic/analysis, so I cant see what his employment is/was....

regards

by steven | 23rd Feb 12, 9:11am 1329941476

What does the bible say are our rights over the world?

regards

by steven | 23rd Feb 12, 9:08am 1329941332

uh.....comments up to your usual standard I see....

regards

by David Chaston | 23rd Feb 12, 8:09am 1329937788

To follow the actual reference prices for crude oil that NZ buys, in both US$ and NZ$ per barrel, we chart the MED researched series here »

http://www.interest.co.nz/charts/commodities/oil-and-petrol

Click through the tabs till you get to the crude oil prices. It is updated weekly (usually on a Tuesday), a few minutes after the MED release their NZ monitoring data.

by skudiv | 23rd Feb 12, 8:45am 1329939946

Cheers, it still adds to my confusion, why are petrol prices so high? Oil in NZD is way way of its highs.

Is there a reason I can never see the scale on any of the charts?

by meh | 23rd Feb 12, 9:28am 1329942485

What I'd like to know is how many litres of oil per barrel and how many litres of petrol this converts to. How much of the barrell cost is speculation from traders? Same as any commodities really.

by steven | 23rd Feb 12, 9:44am 1329943488

in 2008 there was a lot of speculation, today its very risky, july 2008 with the plunge in price burnt speculators badly...so the degree of specualtion could be way less if not zero IMHO.

About 15~20 US gallons of petrol per 42US gallons of crude (thats a barrel) It depends on whether its light sweet or sour hvy....tar sands is way worse.....

regards

by steven | 23rd Feb 12, 9:37am 1329943045

Price is rising due to lack of extra production, so demand is causing rationing via price.

Economist's take on the BP world review (and frankly the BP review is dubious, ie overly optimistic),

http://www.economist.com/blogs/dailychart/2011/06/oil-production-and-co…

Anyway that $147 was degree of speculative bubble...

So some really rough calcs,

The record of $147 in 2008 was probably factored in a lot of speculation I suspect...so today Brent is $122 when it was $147....

4 years inflation value, at say 2% per year means that price is about $159 a barrel equiv today, so 159 - 122 = $37 speculators effect...I really doubt with a very likely depression/recession really soon that many large speculators are now gambling in the oil futures market.

So when you take out that probable speculation we see a true price of about $122 why? because, )

Peak oil production was 72mbpd in 2006 (say, ie give or take a bit of time/volume) The rest about 14mbpd is made up from condensates....to 86mbpd....essentially flat from about 2008 with demand rising at......2% per year (roughly).

Now its arguable that there was some spare capacity in Saudi, they claimed 5 or 6 but the reality is its was 2mbpd in 2008......Libya was roughly 2mpbd before the overthrow so at best we have a net capacity...

So lets say in 2008 we had 84mbpd actual demand and 2mbpd spare, in 4 years at 2% that means the wanted output is pretty close to 91mbpd...even if Saudi did have 5 or 6 we lost at least 1 to libya......

So this suggests we are pushing up against a ceiling and the outlet is higher prices. the Shell exec clearly shows a panic...watch that youtube piece if you have not....its asian demand thats the problem and he for one ignored that, or wouldnt admit it...

By all means subsitute in better numbers....I have a spreadhseet I just wrote to model the above....

regards

by skudiv | 23rd Feb 12, 9:52am 1329943935

That would explain oil prices, but does not explain the widening between crude and petrol.

by steven | 23rd Feb 12, 10:15am 1329945349

I dont follow you, URL(s)?

Crude is rising in price so so will petrol.....also the demand for diesel is outstripping the refinery output, hence diesel's price is rising faster....than petrol I believe....If petrol's output is also constrained in Asia and indian demand is up (say) then that would explain it)..

There is a comment that Marsden point is having money spent on it to upgrade its efficiency.....which tends to support my constrained product output theory.......

regards