WEBVTT - 'We've been warned': Tom Elliott and Peter Anderson unpack petrol rationing 0:00:00.120 --> 0:00:02.960 But look at Sergioc now. I mean, we've got diesel 0:00:02.960 --> 0:00:06.360 running out in some regional towns like Robinvale in the 0:00:06.360 --> 0:00:10.879 state's north west. Also, we can get diesel and reasonable Victoria. 0:00:10.880 --> 0:00:15.120 It's now topping were told $3 a litre. Um should 0:00:15.120 --> 0:00:18.160 we ration the fuel now? Rationing of course, is designed 0:00:18.160 --> 0:00:21.440 to reduce overall fuel usage and make people think twice 0:00:21.440 --> 0:00:24.799 about driving. Thus far, in most places you can still 0:00:24.800 --> 0:00:27.120 get fuel. You just pay a lot of money for it. 0:00:27.120 --> 0:00:30.400 But should it be rationed? Because what's happening is, I mean, 0:00:30.440 --> 0:00:32.840 and this is the flow on effect of having very 0:00:32.840 --> 0:00:36.760 high oil prices. Viva energy, which makes polypropylene, which is 0:00:36.760 --> 0:00:40.159 a common form of plastic. Their prices are going up 0:00:40.200 --> 0:00:42.839 dramatically because the fuel stock, which is oil, has gone 0:00:42.840 --> 0:00:47.640 up in price. And transport companies have to soon raise 0:00:47.640 --> 0:00:51.760 their freight rates because they almost all burn diesel and 0:00:51.760 --> 0:00:55.720 diesel is getting dramatically more expensive and in some cases 0:00:55.720 --> 0:00:58.720 not actually available. Our next guest is CEO of the 0:00:58.720 --> 0:01:02.320 Victorian Transport Association, Peter Anderson. Good morning. 0:01:02.760 --> 0:01:03.560 Good morning Tom. 0:01:03.800 --> 0:01:05.640 Have we seen the flow on effect yet? You know 0:01:05.680 --> 0:01:09.040 diesel being $2.80 to $3 a litre. Have we seen 0:01:09.040 --> 0:01:13.160 that translate into higher freight rates and therefore higher costs 0:01:13.160 --> 0:01:14.640 for goods that are transported? 0:01:15.040 --> 0:01:17.920 Huge impost on the transport industry. Fuel is around about 0:01:17.920 --> 0:01:21.400 25 to 30% of direct costs of any transport business. 0:01:21.400 --> 0:01:24.760 And um and the sudden rise up to $1 a 0:01:24.760 --> 0:01:28.679 litre is absolutely abhorrent for our industry. And and we 0:01:28.680 --> 0:01:30.760 have to pass it on. We, a lot of companies 0:01:30.760 --> 0:01:35.160 have a fuel surcharge mechanism and we implore those, those, um, 0:01:35.160 --> 0:01:38.920 those customers to honour that system because we have to 0:01:38.959 --> 0:01:40.080 pass the cost on. 0:01:40.280 --> 0:01:42.720 I went to the supermarket last night for the weekly 0:01:42.720 --> 0:01:45.840 shop dinner for two nights. Five days of school lunches, 0:01:45.840 --> 0:01:49.200 that sort of thing. And what normally costs about $70 0:01:49.200 --> 0:01:51.440 because we buy, you know, give or take pretty much 0:01:51.440 --> 0:01:54.840 the same stuff. Suddenly last night was $90, and I 0:01:54.840 --> 0:01:58.240 reckon that might be the start of, you know, supermarket 0:01:58.240 --> 0:02:01.320 shelves bearing higher prices because of the higher oil price. 0:02:02.240 --> 0:02:04.640 We've got to be careful about our retail prices, Tom. 0:02:04.680 --> 0:02:06.360 I mean, you've got to keep in mind that the 0:02:06.400 --> 0:02:09.320 transport logistics is around about 12 to 13% of the 0:02:09.320 --> 0:02:13.320 cost of goods sold. And and in that context, if 0:02:13.360 --> 0:02:17.720 fuel is then only represents 25% of that 12 to 13%. 0:02:17.720 --> 0:02:21.200 And there again it increases by 50%. What I'm talking 0:02:21.200 --> 0:02:23.840 about as I as I go through that, it's a 0:02:23.840 --> 0:02:24.680 small number. 0:02:24.720 --> 0:02:27.280 Like maybe 3 or 4 or 5%. Yeah. 0:02:27.560 --> 0:02:31.160 And we shouldn't be elevating our pricing by 30 or 40% 0:02:31.160 --> 0:02:33.600 like we're seeing at the bowser. Yeah. It's not a 0:02:33.600 --> 0:02:36.800 it's not a direct correlation. So we've got to make 0:02:36.800 --> 0:02:38.000 to keep that in mind. 0:02:38.040 --> 0:02:40.839 Are most of your members still able to get the 0:02:40.840 --> 0:02:42.960 diesel that they need? You know, the volume, even if 0:02:42.960 --> 0:02:44.160 it is at a higher price. 0:02:45.000 --> 0:02:47.880 Well, there's a difference between uncertainty and supply at the moment. 0:02:47.880 --> 0:02:50.480 So at the moment the prices are going up because 0:02:50.520 --> 0:02:53.160 there's a degree of uncertainty about supply, and we're not 0:02:53.160 --> 0:02:55.480 sure whether we'll be be able to have the fuel 0:02:55.480 --> 0:02:57.440 in the future. And I think a lot of lot 0:02:57.480 --> 0:03:01.600 of organisations and businesses are starting to to create some 0:03:01.760 --> 0:03:05.200 some reserves in their systems, such as as the wheat 0:03:05.200 --> 0:03:08.280 and up in the mallee. Um, and, and that in 0:03:08.280 --> 0:03:12.440 itself creates a perception of, of lack of supply only 0:03:12.440 --> 0:03:14.920 because the fuel industry can only work at one speed. 0:03:14.960 --> 0:03:17.760 There's only so many trucks to deliver and they only, 0:03:17.760 --> 0:03:20.320 and they don't drive any faster and there aren't any more. 0:03:20.520 --> 0:03:22.760 So they're still doing the job that they have to do. 0:03:23.040 --> 0:03:26.160 But it's just unfortunate that we've got increased demand with 0:03:26.160 --> 0:03:27.290 people filling up their tanks. 0:03:27.330 --> 0:03:29.329 Yeah, I saw a picture of, I think it was 0:03:29.330 --> 0:03:31.089 a farmer. He had a ute. It was about four 0:03:31.090 --> 0:03:33.690 days ago and he had a huge tank on the 0:03:33.690 --> 0:03:36.210 back of the ute. It was sort of semi transparent plastic. 0:03:36.490 --> 0:03:38.970 And apparently he had 1000l of diesel in there. Now 0:03:38.970 --> 0:03:40.650 he'd just gone and got it out of the local pump. 0:03:40.650 --> 0:03:43.410 So he would have paid, you know, close to $3,000 0:03:43.410 --> 0:03:45.210 for all of that. But that's what you're saying because 0:03:45.210 --> 0:03:49.010 people are stockpiling, it's actually increasing the demand for diesel 0:03:49.010 --> 0:03:51.410 at a time when there is uncertainty about the future. 0:03:51.930 --> 0:03:55.450 Correct. And of course, when we start talking about about 0:03:55.970 --> 0:03:58.850 whether we're going to ration fuel, we're still a fair 0:03:58.890 --> 0:04:00.730 way away from that. We're a long way away from that. 0:04:00.730 --> 0:04:03.850 We've got a lot of supply in Australia and those 0:04:03.850 --> 0:04:06.530 supply chains are working. Um, it's just a matter of 0:04:06.530 --> 0:04:08.490 how we then control that and manage that. But in 0:04:08.490 --> 0:04:10.930 the future, yeah, there's lots of mechanisms we can put 0:04:10.930 --> 0:04:14.050 into place to ensure that we get even and a 0:04:14.050 --> 0:04:15.290 fair supply to everyone. 0:04:15.330 --> 0:04:16.370 Well, what about the fact that. 0:04:16.370 --> 0:04:19.370 Our stockpiles have never been particularly high? I had a 0:04:19.370 --> 0:04:21.489 listener who sent me a graph and it said that 0:04:21.810 --> 0:04:24.570 this is private, and public supplies, like the Netherlands, keeps 0:04:24.570 --> 0:04:28.370 more than a year of fuel on hand, possibly at 0:04:28.370 --> 0:04:31.609 Rotterdam at that giant port. Denmark has almost a year. 0:04:31.650 --> 0:04:34.610 Finland has about 300 days. And on and on it goes. 0:04:34.650 --> 0:04:37.530 And there's us with, you know, 34 days or thereabouts. 0:04:37.529 --> 0:04:40.529 Do we need to rethink this once this crisis has passed? 0:04:40.850 --> 0:04:44.690 We have we have what's called an Emergency Liquid Fuel Act, 0:04:45.050 --> 0:04:49.010 which which deals with this particular issue that you're talking about. Um, 0:04:49.210 --> 0:04:52.210 it doesn't need revision. It needs revision on a constant basis. 0:04:52.210 --> 0:04:54.450 I think we should be looking a lot further into 0:04:54.450 --> 0:04:58.490 the future to ensure that our security of fuel, um, 0:04:58.970 --> 0:05:01.730 is more stable than what it currently is at the moment. 0:05:01.770 --> 0:05:04.969 And one incident in the world shouldn't change everything for us. 0:05:05.450 --> 0:05:07.650 No, but maybe it should, because we signed a thing 0:05:07.690 --> 0:05:10.650 years ago saying we pledged to hold 90 days worth 0:05:10.650 --> 0:05:12.890 of oil and petrol and diesel on hand. Instead we 0:05:12.890 --> 0:05:15.570 have 30. Alright. Thank you. Peter. Peter Anderson, their CEO 0:05:15.570 --> 0:05:18.650 of the Victorian Transport Association. And look, it's something we 0:05:18.650 --> 0:05:20.490 should do. I mean, other countries do it because they 0:05:20.490 --> 0:05:23.210 just know that the world is an uncertain place. I 0:05:23.250 --> 0:05:26.650 have no doubt eventually this current crisis will pass and 0:05:26.650 --> 0:05:29.089 it may be sooner rather than later, but we should 0:05:29.089 --> 0:05:32.090 use that as an opportunity. We've been warned. You cannot 0:05:32.089 --> 0:05:34.930 always depend on these extended supply lines. We can't just 0:05:34.930 --> 0:05:37.929 assume that every time we need a cargo of fuel, 0:05:37.930 --> 0:05:40.770 it will arrive and also at a price that we 0:05:40.770 --> 0:05:44.890 can afford 133693 at 9:18.