Record high petrol prices are hitting Australians hard, but none more so than in regional areas, as high prices of other essential services and products, coupled with long travel distances, force rural communities to rethink how they live and do business.
Yahoo Finance spoke with Tamworth Mayor Cr Russell Webb, who said due to the long distances rural people travel every day to access work and essential services, fuel prices have a much larger impact in these communities than in city centres.
Cr Webb, who also runs a farming business outside Tamworth, said that as fuel sits around $2 per litre and threatens to go higher, rural families, particularly farming ones, will be forced to make changes to their daily lives.
High costs across the board
“The comments I’m getting are not only from the business and farming community, but from families who are now saying increases in fuel costs and energy costs are having such an impact on family budgets that it’s starting to make them rethink about what they do in their daily activities," Webb said.
“Do they travel away for the weekend like they used to? What do they do to make sure there’s enough money in the family budget to allow them to cover their travelling costs to and from work and to do their normal business, like shopping or going to see family members?
“In the rural landscape, we’ve seen some massive increases in input prices across the board. We’ve seen a massive spike in prices of fertiliser, a massive spike in prices of chemicals, and a massive spike in the price of diesel to run your tractors and other pieces of equipment.
“Yes we have had some good seasons and yes we have had some good commodity prices, but unless we keep those high commodity prices and good seasons going, the input cost of cropping is going to prevent people from planting some of the big crops that they have in the past.”
An opportunity to embrace new technology
Dubbo Mayor Matthew Dickerson, who said he was “the first Mayor in the nation to drive a fully electric vehicle” as his mayoral car, said the high fuel prices are an opportunity for rural people to embrace new and freely available technology to reduce the cost of living and doing business.
“The good news out of high petrol prices is in the past people have thought electric vehicles were too expensive," Dickerson said.
“When people start to see how high petrol prices are, when they look at the cost of ownership of an electric vehicle, they’ll start to realise, yes, they’re more expensive to buy but the running and maintenance costs are so much lower than an ICE (Internal Combustion Engine) vehicle.
“Only 1.9 percent of all new cars sold in Australia last year were electric powered. Compare that to Norway, which had 92 percent of all new cars sold being electric.
“We are a bit of a laughing stock around the world about how many electric vehicles we're buying. Maybe expensive petrol prices will change people’s opinions and maybe we will start to catch up with the rest of the world.”
Preventing unnecessary travel
Cr Dickerson added that restrictions and lockdowns from Covid-19 had also forced rural people to rely on video conferencing technology to conduct business, which is also a way for them to avoid paying high costs for fuel.
“I see examples of where people around the community, in nearby areas like Wellington and Narromine, in the past they would’ve jumped in the car, driven to Dubbo, had a meeting that went for all of an hour and then driven home.
“Now they are doing that via video conferencing, which is fantastic and makes common sense from a best use of your time perspective but also it makes sense in not wasting petrol.”
Australia reliant on overseas markets
Wary of rural people being forced out of their livelihoods, Cr Webb believes the solution to high fuel costs lies in Australia producing its own oil and refining it domestically rather than relying on overseas markets over which we have no control.
“Australia is so reliant on oil from overseas I think it would be great if we did have systems in place in this country to refine oil and produce fuel. It might help with the price but it will certainly help with our own security.”
Treasurer Josh Frydenberg told Yahoo News Australia that there were “a number of factors behind movements in petrol prices including higher global oil prices, the exchange rate and supply chain disruptions.
"To support Australians during this pandemic, the Government has focused on keeping the economy strong, keeping people in work and letting them keep more of what they earn.
“More than $29 billion in tax relief has flowed to 11.5 million Australians since the onset of the pandemic, with $1,320 on average flowing over the last 6 months alone,” Mr Frydenberg said.
An ACCC spokesperson told Yahoo News Australia that the federal government set it the task to monitor petrol prices in all capital cities and over 190 regional locations, and provides information about the petrol price cycles that regularly occur in the five largest cities.
“Around 85 per cent of the average price of petrol is made up of the international price of refined petrol and taxes (which includes excise and the GST). These components are largely outside the control of the local petrol retailers.
“With petrol prices currently high, it is important for motorists to use available free fuel price apps and websites to shop around because in many locations there can be a range of prices available,” the spokesperson said.