Osama Index Graphic for Perth, Western Australia
In the months immediately post 9/11, Oil Companies grabbed a several percent extra profit margin by not reducing pump prices in line with world oil. I noticed this living in Perth and in early 2002 I developed this web site, highlighting my Osama Index which amazingly has increased over the last two years ending 2003 at 47.5 after peaking at 49.9 in September. In late 2001Australia went through a Federal Election campaign, which along with issues of international terrorism tended to dominate the news. You would have to say, absolutely brilliant choice of timing by the Oil Companies to slip in a major increase in petrol margins.
I do not have the advantage of having all the price data the Oil Co's and Govts. have, so in early 2002 I showed this margins hike by introducing my simple Osama Index which derives from pump prices in cents per litre minus world oil prices in A$. This may give a simplistic picture of margins but the Osama Index certainly does reflect trends in changes in OilCo margins over time. From January 2001 to August 2001 the Osama Index averaged 37.7 and from September 2001 to April 2003 averaged 41.5. My little Osama Index has surprised me by ending 2003 at 47.5 after peaking at 49.9 in September. If it was a share you would buy it.
World oil peaked in Feb 2003 at A$58 just before the Iraq war and fell after that to be ~$42 in last couple of months. Australian ULP pump prices peaked in March and never fell as much as they should in the rest of 2003. My Osama Index rose steeply in most capitals after February 2003, generally to the highest levels over the last three years.
It so happens that Western Australia is the state most affected by Oil Company margin increases over the post 9/11 period.
To my simple mind, assuming that grand sounding terms such as "Import Parity Pricing" have any meaning, then Australian pump prices should track in proportion to a basket of wholesale petrol prices in our region, allowing for currency movements. We have seen on the front page how USA pump prices have fallen in A$ Jan 2001 to Dec 2003 while Australian pump prices have risen a few cents, the difference ranging from 15 to 18 cents. Motorists would be pretty happy if we could import petroleum products competitively with the Thais, which would see Australian pump prices drop say 10 cents / litre.
Comments on the cities.
Brisbane was hit by the biggest increase post 9/11, but has been in the middle of the pack over the entire three years, there are some Govt./ subsidies there ? Darwin saw little increase post 9/11 but was hit hard post Iraq war.
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