A Facebook meme claims that oil prices in 2008 were 50 percent higher than in 2022, but almost half that at petrol pumps.
The meme, which has been shared widely in Australia and Canada (here, here, here and here), says oil was $147 a barrel in 2008. this is wrong.
World Bank data shows that crude oil prices (in US dollars per barrel) jumped in 2008, but reached only $132.83 in July. They started at $90.69 in January and dropped to $41.34 in December.
The price per barrel in 2022 started at $69.96 in early January and steadily rose to a peak of $123.5 on March 8. At the time of writing it was 109.5.
The meme also claims that in 2008 the price of petrol was $1 per liter and in 2022 the price of petrol was $1.83 per liter.
This Australian Institute of Petroleum chart shows that the Australian national average for unleaded petrol (including GST) in 2008 was $1.36 a liter and this year – from 1 January to 18 March – the chart showed the price of petrol from $166.3 to $188.6 per liter. Was.
According to Statistics Canada, unleaded petrol (in Canadian dollars) in January 2008 varied from $100.3 in Alberta to $115.3 in Quebec. Petrol prices for that year peaked in December ($130.3 in Edmonton, Alberta, $156.5 in Victoria, British Columbia) (from $69.5 in Ottawa-Gatineau, Ontario to $99 in Yellowknife, Northwest Territories) in December She was
For 2022 in Canada, only regional petrol prices were recorded for January and February, which showed that prices ranged from $133.7 to $177.1. No March figures were available at the time of writing.
Nicolas de Rouge, an associate professor specializing in retail petrol markets at the School of Economics, University of Sydney, said comparing oil prices in 2008 to 2022 is like comparing apples to oranges, as 2008 was an anomaly, with extreme volatility. Downsizing prices were recorded.
“2008 was a crazy year, with oil prices fluctuating wildly,” he said. AAP FactCheck by email.
He noted that Australian oil prices rose sharply in the latter quarter in 2008 when the global financial crisis – the deepest recession in the world economy since World War II – hit. Between July 2002 and July 2008, a clear upward trend in prices was evident, while the second half of 2008 saw a sharp decline in prices.
Dr de Rouge explained that the cost of a petrol pump in Australia is not determined exclusively by oil prices, but by Terminal Gates Prices (TGP), which are wholesale prices available to petrol retailers.
TPGs take into account changes not only in oil prices but also in exchange rates and taxes.
“Oil prices are denominated in US dollars, so you have to account for the AUD-USD exchange rate to understand pricing in Australia, and TGPs do that for you,” he said.
The current TGP sits at around $1.98 a liter, but could reach $2.50 later this year if the war in Ukraine continues and propels global oil prices, predicts ComSec’s chief economist Craig James.
In 2008, TGP rose above $1.60 a liter in July and fell to $1.00 in December, and retail prices rose from $1.70 a liter (June/July) to $1.00 (December), Dr. de Rouge said.
“Because of the high volatility, there was a time in 2008 when exchange rate-adjusted oil prices were high, and a time when retail petrol prices were low, but they were not at the same time of year.”
The volatility is supported by the Australian Competition and Consumer Commission (ACCC) report, Monitoring of the Australian Petroleum Industry 2009 – summary. The report on the prices, costs and profits of unleaded petrol in Australia states: “After reaching above 160 cents a liter in July 2008, retail prices fell sharply between October and December 2008, coinciding with the onset of the global financial crisis. “
Similarly, an ABC News article cited the ACCC as the “most volatile on record” petrol prices during the 2008–09 fiscal year.
The meme also stated that “war in Ukraine is not the reason” for the price change.
In response, Dr. de Russo said that oil prices were unusually high even before the conflict, but have risen further since Russia launched a full-scale military offensive on Ukraine on February 24.
“It’s hard to say what petrol would have cost without a struggle, but I’d be surprised if it would have been much below $2.00 a liter,” he said.
Before the invasion of Ukraine, the COVID-19 pandemic had already caused a rise in petrol prices, said David Byrne, renowned associate professor at the University of Melbourne’s Faculty of Business and Economics, in an April 2020 analysis.
The ACCC’s latest petrol monitoring report said petrol prices in Australia’s five largest cities hit an eight-year peak in February, triggered by conflict in Ukraine, after the OPEC cartel stopped boosting crude production. declined and oil demand recovered as countries ease COVID restrictions.
The report shows daily average retail petrol prices in Sydney, Melbourne, Brisbane, Adelaide and Perth rose to 182.4 cents a liter in February – the highest level since 2014. The prices have increased further in the first two weeks of March.
“The world was already facing high crude oil prices at the end of last year due to the continued actions of OPEC and the Russia Cartel and the enduring Northern Hemisphere energy crisis. The shocking events in Ukraine pushed crude oil prices even higher. Because Russia is a major supplier of oil,” former ACCC chairman Rod Sims said in a media release.
“Crude oil prices have been climbing sharply since the end of 2020 and prices have been followed here.”
Statistics show that oil prices in 2008 were not consistently higher than in 2022 and did not reach a peak of $147 a barrel. Petrol was also not nearly half the price 14 years ago as claimed in the post. This is for both Australia and Canada, where the meme is airing.
The war in Ukraine, which began in February, is one of the factors driving up petrol prices in Australia, an expert confirmed AAP FactCheck,
false – The claim is false.
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