1 00:00:00,120 --> 00:00:02,960 S1: But look at Sergioc now. I mean, we've got diesel 2 00:00:02,960 --> 00:00:06,360 S1: running out in some regional towns like Robinvale in the 3 00:00:06,360 --> 00:00:10,879 S1: state's north west. Also, we can get diesel and reasonable Victoria. 4 00:00:10,880 --> 00:00:15,120 S1: It's now topping were told $3 a litre. Um should 5 00:00:15,120 --> 00:00:18,160 S1: we ration the fuel now? Rationing of course, is designed 6 00:00:18,160 --> 00:00:21,440 S1: to reduce overall fuel usage and make people think twice 7 00:00:21,440 --> 00:00:24,799 S1: about driving. Thus far, in most places you can still 8 00:00:24,800 --> 00:00:27,120 S1: get fuel. You just pay a lot of money for it. 9 00:00:27,120 --> 00:00:30,400 S1: But should it be rationed? Because what's happening is, I mean, 10 00:00:30,440 --> 00:00:32,840 S1: and this is the flow on effect of having very 11 00:00:32,840 --> 00:00:36,760 S1: high oil prices. Viva energy, which makes polypropylene, which is 12 00:00:36,760 --> 00:00:40,159 S1: a common form of plastic. Their prices are going up 13 00:00:40,200 --> 00:00:42,839 S1: dramatically because the fuel stock, which is oil, has gone 14 00:00:42,840 --> 00:00:47,640 S1: up in price. And transport companies have to soon raise 15 00:00:47,640 --> 00:00:51,760 S1: their freight rates because they almost all burn diesel and 16 00:00:51,760 --> 00:00:55,720 S1: diesel is getting dramatically more expensive and in some cases 17 00:00:55,720 --> 00:00:58,720 S1: not actually available. Our next guest is CEO of the 18 00:00:58,720 --> 00:01:02,320 S1: Victorian Transport Association, Peter Anderson. Good morning. 19 00:01:02,760 --> 00:01:03,560 S2: Good morning Tom. 20 00:01:03,800 --> 00:01:05,640 S1: Have we seen the flow on effect yet? You know 21 00:01:05,680 --> 00:01:09,040 S1: diesel being $2.80 to $3 a litre. Have we seen 22 00:01:09,040 --> 00:01:13,160 S1: that translate into higher freight rates and therefore higher costs 23 00:01:13,160 --> 00:01:14,640 S1: for goods that are transported? 24 00:01:15,040 --> 00:01:17,920 S2: Huge impost on the transport industry. Fuel is around about 25 00:01:17,920 --> 00:01:21,400 S2: 25 to 30% of direct costs of any transport business. 26 00:01:21,400 --> 00:01:24,760 S2: And um and the sudden rise up to $1 a 27 00:01:24,760 --> 00:01:28,679 S2: litre is absolutely abhorrent for our industry. And and we 28 00:01:28,680 --> 00:01:30,760 S2: have to pass it on. We, a lot of companies 29 00:01:30,760 --> 00:01:35,160 S2: have a fuel surcharge mechanism and we implore those, those, um, 30 00:01:35,160 --> 00:01:38,920 S2: those customers to honour that system because we have to 31 00:01:38,959 --> 00:01:40,080 S2: pass the cost on. 32 00:01:40,280 --> 00:01:42,720 S1: I went to the supermarket last night for the weekly 33 00:01:42,720 --> 00:01:45,840 S1: shop dinner for two nights. Five days of school lunches, 34 00:01:45,840 --> 00:01:49,200 S1: that sort of thing. And what normally costs about $70 35 00:01:49,200 --> 00:01:51,440 S1: because we buy, you know, give or take pretty much 36 00:01:51,440 --> 00:01:54,840 S1: the same stuff. Suddenly last night was $90, and I 37 00:01:54,840 --> 00:01:58,240 S1: reckon that might be the start of, you know, supermarket 38 00:01:58,240 --> 00:02:01,320 S1: shelves bearing higher prices because of the higher oil price. 39 00:02:02,240 --> 00:02:04,640 S2: We've got to be careful about our retail prices, Tom. 40 00:02:04,680 --> 00:02:06,360 S2: I mean, you've got to keep in mind that the 41 00:02:06,400 --> 00:02:09,320 S2: transport logistics is around about 12 to 13% of the 42 00:02:09,320 --> 00:02:13,320 S2: cost of goods sold. And and in that context, if 43 00:02:13,360 --> 00:02:17,720 S2: fuel is then only represents 25% of that 12 to 13%. 44 00:02:17,720 --> 00:02:21,200 S2: And there again it increases by 50%. What I'm talking 45 00:02:21,200 --> 00:02:23,840 S2: about as I as I go through that, it's a 46 00:02:23,840 --> 00:02:24,680 S2: small number. 47 00:02:24,720 --> 00:02:27,280 S1: Like maybe 3 or 4 or 5%. Yeah. 48 00:02:27,560 --> 00:02:31,160 S2: And we shouldn't be elevating our pricing by 30 or 40% 49 00:02:31,160 --> 00:02:33,600 S2: like we're seeing at the bowser. Yeah. It's not a 50 00:02:33,600 --> 00:02:36,800 S2: it's not a direct correlation. So we've got to make 51 00:02:36,800 --> 00:02:38,000 S2: to keep that in mind. 52 00:02:38,040 --> 00:02:40,839 S1: Are most of your members still able to get the 53 00:02:40,840 --> 00:02:42,960 S1: diesel that they need? You know, the volume, even if 54 00:02:42,960 --> 00:02:44,160 S1: it is at a higher price. 55 00:02:45,000 --> 00:02:47,880 S2: Well, there's a difference between uncertainty and supply at the moment. 56 00:02:47,880 --> 00:02:50,480 S2: So at the moment the prices are going up because 57 00:02:50,520 --> 00:02:53,160 S2: there's a degree of uncertainty about supply, and we're not 58 00:02:53,160 --> 00:02:55,480 S2: sure whether we'll be be able to have the fuel 59 00:02:55,480 --> 00:02:57,440 S2: in the future. And I think a lot of lot 60 00:02:57,480 --> 00:03:01,600 S2: of organisations and businesses are starting to to create some 61 00:03:01,760 --> 00:03:05,200 S2: some reserves in their systems, such as as the wheat 62 00:03:05,200 --> 00:03:08,280 S2: and up in the mallee. Um, and, and that in 63 00:03:08,280 --> 00:03:12,440 S2: itself creates a perception of, of lack of supply only 64 00:03:12,440 --> 00:03:14,920 S2: because the fuel industry can only work at one speed. 65 00:03:14,960 --> 00:03:17,760 S2: There's only so many trucks to deliver and they only, 66 00:03:17,760 --> 00:03:20,320 S2: and they don't drive any faster and there aren't any more. 67 00:03:20,520 --> 00:03:22,760 S2: So they're still doing the job that they have to do. 68 00:03:23,040 --> 00:03:26,160 S2: But it's just unfortunate that we've got increased demand with 69 00:03:26,160 --> 00:03:27,290 S2: people filling up their tanks. 70 00:03:27,330 --> 00:03:29,329 S1: Yeah, I saw a picture of, I think it was 71 00:03:29,330 --> 00:03:31,089 S1: a farmer. He had a ute. It was about four 72 00:03:31,090 --> 00:03:33,690 S1: days ago and he had a huge tank on the 73 00:03:33,690 --> 00:03:36,210 S1: back of the ute. It was sort of semi transparent plastic. 74 00:03:36,490 --> 00:03:38,970 S1: And apparently he had 1000l of diesel in there. Now 75 00:03:38,970 --> 00:03:40,650 S1: he'd just gone and got it out of the local pump. 76 00:03:40,650 --> 00:03:43,410 S1: So he would have paid, you know, close to $3,000 77 00:03:43,410 --> 00:03:45,210 S1: for all of that. But that's what you're saying because 78 00:03:45,210 --> 00:03:49,010 S1: people are stockpiling, it's actually increasing the demand for diesel 79 00:03:49,010 --> 00:03:51,410 S1: at a time when there is uncertainty about the future. 80 00:03:51,930 --> 00:03:55,450 S2: Correct. And of course, when we start talking about about 81 00:03:55,970 --> 00:03:58,850 S2: whether we're going to ration fuel, we're still a fair 82 00:03:58,890 --> 00:04:00,730 S2: way away from that. We're a long way away from that. 83 00:04:00,730 --> 00:04:03,850 S2: We've got a lot of supply in Australia and those 84 00:04:03,850 --> 00:04:06,530 S2: supply chains are working. Um, it's just a matter of 85 00:04:06,530 --> 00:04:08,490 S2: how we then control that and manage that. But in 86 00:04:08,490 --> 00:04:10,930 S2: the future, yeah, there's lots of mechanisms we can put 87 00:04:10,930 --> 00:04:14,050 S2: into place to ensure that we get even and a 88 00:04:14,050 --> 00:04:15,290 S2: fair supply to everyone. 89 00:04:15,330 --> 00:04:16,370 S3: Well, what about the fact that. 90 00:04:16,370 --> 00:04:19,370 S1: Our stockpiles have never been particularly high? I had a 91 00:04:19,370 --> 00:04:21,489 S1: listener who sent me a graph and it said that 92 00:04:21,810 --> 00:04:24,570 S1: this is private, and public supplies, like the Netherlands, keeps 93 00:04:24,570 --> 00:04:28,370 S1: more than a year of fuel on hand, possibly at 94 00:04:28,370 --> 00:04:31,609 S1: Rotterdam at that giant port. Denmark has almost a year. 95 00:04:31,650 --> 00:04:34,610 S1: Finland has about 300 days. And on and on it goes. 96 00:04:34,650 --> 00:04:37,530 S1: And there's us with, you know, 34 days or thereabouts. 97 00:04:37,529 --> 00:04:40,529 S1: Do we need to rethink this once this crisis has passed? 98 00:04:40,850 --> 00:04:44,690 S2: We have we have what's called an Emergency Liquid Fuel Act, 99 00:04:45,050 --> 00:04:49,010 S2: which which deals with this particular issue that you're talking about. Um, 100 00:04:49,210 --> 00:04:52,210 S2: it doesn't need revision. It needs revision on a constant basis. 101 00:04:52,210 --> 00:04:54,450 S2: I think we should be looking a lot further into 102 00:04:54,450 --> 00:04:58,490 S2: the future to ensure that our security of fuel, um, 103 00:04:58,970 --> 00:05:01,730 S2: is more stable than what it currently is at the moment. 104 00:05:01,770 --> 00:05:04,969 S2: And one incident in the world shouldn't change everything for us. 105 00:05:05,450 --> 00:05:07,650 S1: No, but maybe it should, because we signed a thing 106 00:05:07,690 --> 00:05:10,650 S1: years ago saying we pledged to hold 90 days worth 107 00:05:10,650 --> 00:05:12,890 S1: of oil and petrol and diesel on hand. Instead we 108 00:05:12,890 --> 00:05:15,570 S1: have 30. Alright. Thank you. Peter. Peter Anderson, their CEO 109 00:05:15,570 --> 00:05:18,650 S1: of the Victorian Transport Association. And look, it's something we 110 00:05:18,650 --> 00:05:20,490 S1: should do. I mean, other countries do it because they 111 00:05:20,490 --> 00:05:23,210 S1: just know that the world is an uncertain place. I 112 00:05:23,250 --> 00:05:26,650 S1: have no doubt eventually this current crisis will pass and 113 00:05:26,650 --> 00:05:29,089 S1: it may be sooner rather than later, but we should 114 00:05:29,089 --> 00:05:32,090 S1: use that as an opportunity. We've been warned. You cannot 115 00:05:32,089 --> 00:05:34,930 S1: always depend on these extended supply lines. We can't just 116 00:05:34,930 --> 00:05:37,929 S1: assume that every time we need a cargo of fuel, 117 00:05:37,930 --> 00:05:40,770 S1: it will arrive and also at a price that we 118 00:05:40,770 --> 00:05:44,890 S1: can afford 133693 at 9:18.