S1: But look at Sergioc now. I mean, we've got diesel
S1: running out in some regional towns like Robinvale in the
S1: state's north west. Also, we can get diesel and reasonable Victoria.
S1: It's now topping were told $3 a litre. Um should
S1: we ration the fuel now? Rationing of course, is designed
S1: to reduce overall fuel usage and make people think twice
S1: about driving. Thus far, in most places you can still
S1: get fuel. You just pay a lot of money for it.
S1: But should it be rationed? Because what's happening is, I mean,
S1: and this is the flow on effect of having very
S1: high oil prices. Viva energy, which makes polypropylene, which is
S1: a common form of plastic. Their prices are going up
S1: dramatically because the fuel stock, which is oil, has gone
S1: up in price. And transport companies have to soon raise
S1: their freight rates because they almost all burn diesel and
S1: diesel is getting dramatically more expensive and in some cases
S1: not actually available. Our next guest is CEO of the
S1: Victorian Transport Association, Peter Anderson. Good morning.
S2: Good morning Tom.
S1: Have we seen the flow on effect yet? You know
S1: diesel being $2.80 to $3 a litre. Have we seen
S1: that translate into higher freight rates and therefore higher costs
S1: for goods that are transported?
S2: Huge impost on the transport industry. Fuel is around about
S2: 25 to 30% of direct costs of any transport business.
S2: And um and the sudden rise up to $1 a
S2: litre is absolutely abhorrent for our industry. And and we
S2: have to pass it on. We, a lot of companies
S2: have a fuel surcharge mechanism and we implore those, those, um,
S2: those customers to honour that system because we have to
S2: pass the cost on.
S1: I went to the supermarket last night for the weekly
S1: shop dinner for two nights. Five days of school lunches,
S1: that sort of thing. And what normally costs about $70
S1: because we buy, you know, give or take pretty much
S1: the same stuff. Suddenly last night was $90, and I
S1: reckon that might be the start of, you know, supermarket
S1: shelves bearing higher prices because of the higher oil price.
S2: We've got to be careful about our retail prices, Tom.
S2: I mean, you've got to keep in mind that the
S2: transport logistics is around about 12 to 13% of the
S2: cost of goods sold. And and in that context, if
S2: fuel is then only represents 25% of that 12 to 13%.
S2: And there again it increases by 50%. What I'm talking
S2: about as I as I go through that, it's a
S2: small number.
S1: Like maybe 3 or 4 or 5%. Yeah.
S2: And we shouldn't be elevating our pricing by 30 or 40%
S2: like we're seeing at the bowser. Yeah. It's not a
S2: it's not a direct correlation. So we've got to make
S2: to keep that in mind.
S1: Are most of your members still able to get the
S1: diesel that they need? You know, the volume, even if
S1: it is at a higher price.
S2: Well, there's a difference between uncertainty and supply at the moment.
S2: So at the moment the prices are going up because
S2: there's a degree of uncertainty about supply, and we're not
S2: sure whether we'll be be able to have the fuel
S2: in the future. And I think a lot of lot
S2: of organisations and businesses are starting to to create some
S2: some reserves in their systems, such as as the wheat
S2: and up in the mallee. Um, and, and that in
S2: itself creates a perception of, of lack of supply only
S2: because the fuel industry can only work at one speed.
S2: There's only so many trucks to deliver and they only,
S2: and they don't drive any faster and there aren't any more.
S2: So they're still doing the job that they have to do.
S2: But it's just unfortunate that we've got increased demand with
S2: people filling up their tanks.
S1: Yeah, I saw a picture of, I think it was
S1: a farmer. He had a ute. It was about four
S1: days ago and he had a huge tank on the
S1: back of the ute. It was sort of semi transparent plastic.
S1: And apparently he had 1000l of diesel in there. Now
S1: he'd just gone and got it out of the local pump.
S1: So he would have paid, you know, close to $3,000
S1: for all of that. But that's what you're saying because
S1: people are stockpiling, it's actually increasing the demand for diesel
S1: at a time when there is uncertainty about the future.
S2: Correct. And of course, when we start talking about about
S2: whether we're going to ration fuel, we're still a fair
S2: way away from that. We're a long way away from that.
S2: We've got a lot of supply in Australia and those
S2: supply chains are working. Um, it's just a matter of
S2: how we then control that and manage that. But in
S2: the future, yeah, there's lots of mechanisms we can put
S2: into place to ensure that we get even and a
S2: fair supply to everyone.
S3: Well, what about the fact that.
S1: Our stockpiles have never been particularly high? I had a
S1: listener who sent me a graph and it said that
S1: this is private, and public supplies, like the Netherlands, keeps
S1: more than a year of fuel on hand, possibly at
S1: Rotterdam at that giant port. Denmark has almost a year.
S1: Finland has about 300 days. And on and on it goes.
S1: And there's us with, you know, 34 days or thereabouts.
S1: Do we need to rethink this once this crisis has passed?
S2: We have we have what's called an Emergency Liquid Fuel Act,
S2: which which deals with this particular issue that you're talking about. Um,
S2: it doesn't need revision. It needs revision on a constant basis.
S2: I think we should be looking a lot further into
S2: the future to ensure that our security of fuel, um,
S2: is more stable than what it currently is at the moment.
S2: And one incident in the world shouldn't change everything for us.
S1: No, but maybe it should, because we signed a thing
S1: years ago saying we pledged to hold 90 days worth
S1: of oil and petrol and diesel on hand. Instead we
S1: have 30. Alright. Thank you. Peter. Peter Anderson, their CEO
S1: of the Victorian Transport Association. And look, it's something we
S1: should do. I mean, other countries do it because they
S1: just know that the world is an uncertain place. I
S1: have no doubt eventually this current crisis will pass and
S1: it may be sooner rather than later, but we should
S1: use that as an opportunity. We've been warned. You cannot
S1: always depend on these extended supply lines. We can't just
S1: assume that every time we need a cargo of fuel,
S1: it will arrive and also at a price that we
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