House­holds are un­der the pump

South Waikato News - - Your Paper, Your Place - ROB STOCK

Cars drink up wealth like my chil­dren suck down home­made lemon­ade.

Which is why it is so in­fu­ri­at­ing to see OPEC, the league of big oil-pro­duc­ing coun­tries, com­ing up with a plan to cut oil pro­duc­tion by 15 per cent to drive up the oil price.

OPEC is a club of na­tions with a li­cence to ex­tract money from house­holds.

It’s a car­tel that doesn’t even try to be dis­creet.

If New Zealand banks got to­gether in a dark­ened room and made an agree­ment to lift mar­gins on mort­gages, peo­ple would end up in jail.

But OPEC is out­side of coun­try law, so they can thumb their oily noses at us. Par­tial in­su­la­tion isn’t so hard. For ex­am­ple, buy­ing a house in­su­lates you from land­lords and rent rises. Pay­ing off a mort­gage fast in­su­lates you from ris­ing in­ter­est rates.

But when it comes to petrol, many of us are trapped by the ‘‘tyranny of dis­tance’’.

Tra­di­tion­ally this phrase re­ferred to the dis­tance our ex­ports have to travel to over­seas mar­kets.

Trans­port costs are 14 per cent of the Con­sumer Price In­dex, of which petrol makes up a third. It’s a big bite out of the house­hold bud­get.

Peo­ple who own a house near their work and chil­dren’s schools worry less about petrol prices.

They could even go back to a 1970s-style one-car family set-up like my own.

An study claims the av­er­age Kiwi com­muter spends $11,852 run­ning a car each year.

If they sold it and used pub­lic trans­port, they’d save $9065.78 a year.

If your house­hold can’t do what we’ve done, it might still save petrol by run­ning smaller, more fuel-ef­fi­cient cars, and cut un­nec­es­sary car jour­neys by car­shar­ing, walk­ing, or cycling.

Cut­ting petrol can limit your sense of phys­i­cal free­dom, and travel can take longer.

It can mean liv­ing a more lo­cal life, but that’s been work­ing for us, and the chil­dren be­came much fit­ter now they walk or cy­cle a cou­ple of kilo­me­tres a day.

Be­ing more fru­gal in your spend­ing, and pinch­ing your life­style to cut the amount you have to pay to mo­nop­o­lists and oli­gop­o­lists is in­fu­ri­at­ing.

Iron­i­cally though, it al­lows you to in­su­late your­self even more by grow­ing your wealth faster.

Re­duc­ing your petrol con­sump­tion isn’t just one in the eye for OPEC.

The AA’S Mark Stock­dale says just a quar­ter of the price of petrol is the cost of petrol. An­other quar­ter is the cost of get­ting it to the pump.

All the rest is tax- GST, ex­cise taxes and fuel levies.

‘‘We shouldn’t get too an­gry with Arabs in flow­ing robes, we should be an­gry with the politi­cians in the Bee­hive,’’ he says.

Fair point. When OPEC raises the oil price, your GST bill goes up too!

123RF

Hand over your money. It’s time to re­fill the tank again.

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