Fuel Prices vs Exchange rate, are we being ripped of

[Cruiser 105Tvan]

Everyone moving to Slade point?
That'd be fun to see.

[prodigyrf]

Are we being ripped off?
Yes.
Always have been and always will.

Well that's a common lament but what does it really mean? What it really means is no matter what price fuel is and because it's a major weekly expense we always want it to be cheaper so we can either getaway more often or have more in our pocket for other goodies.
The alternative  is you believe there's supernormal profits to be had in refining and retailing fuel and that's largely because the big bad oilcos are all in cahoots (oligopoly) and they're gouging us accordingly. That's nonsense of course and there's one indefatigable proof of that which should be obvious to us all. Anyone care to spell it out for all the conspiracy theorists, NRMAs, RAAs, ACCCs and sundry gaggle of eggsperts out there that do not not produce and sell so much as a drop of fuel for us all, yet believe we may be or are being ripped off?

[prodigyrf]

I should say in answering that important question to yourself you need to understand implicitly the difference in economic terms between normal and supernormal profit-
http://www.economicsonline.co.uk/Business_economics/Profits.html

[prodigyrf]

The obvious answer to those who believe the Big Bad Oilcos are price gouging and perpetually ripping off all we poor defenceless consumers is of course if you believe they have the oligopolistic power to do that and are indeed doing so, then why on earth do they ever put the prices down, given we were used to paying well over $1.50/L in metro areas and the word was we'd soon see the days of $2/L petrol? Well here in Adelaide they're selling petrol for just under $1.11/L. Dunno about you but I've always been a profit maximizer and cost minimizer and if I had the power to be a half decent oligopolistic ripoff merchant and gouger and there was another 40+c/L margin on my $1.11/L product going begging I'm bloody sure I'd be gouging it and swanning myself in the Maldives with my feet in a bucket of champagne and you lot could please yourselves 

OTOH folks you have to put your tinfoil hat on to stop the alien space rays from getting through and believing that Big Bad Oilcos with oligopolistic gouging ripoff powers in the marketplace have a really wicked sense of humour and are teasing us all 

Here forget the tinfoil hat and educate yourself-
http://www.aip.com.au/pricing/facts/Facts_About_the_Australian_Wholesale_Fuels_Market_and_Prices.htm
http://www.aip.com.au/pricing/facts/Facts_about_Petrol_Prices_and_the_Australian_Fuel_Market.htm

If that doesn't convince you and you still believe there's supernormal profits to be had in flogging fuel in Oz then you and your like minded soul-mates gather your hard-earned together and get out there and scoop them all up while we flock to your cheaper bowser price in droves. Count me a rational skeptic with all those derelict servos about, not to mention the demise of brands like Neptune, Golden Fleece. Ampol, Amoco and the classic for those of us who remember ACTU Solo. That was back in the seventies when Bob Hawke and Co were going to save all we poor downtrodden workers from the vicissitudes of the Arab Oil Crisis. Where are they all now we may well ask?

Have a good New Year and don't forget to fill up at the bottom of the cycle city slickers