Many in retirement are travelling comfortably, with three key factors contributing to their happiness – good physical and mental health and enough money to enjoy life.
Perhaps the assumption that markets are still anchored by predictable economic policies needs to be challenged. For the first time since the fall of the Berlin Wall, political volatility – once background noise – is potentially reshaping investment risk at a structural level.
The good oil: How retirees can drive their petrol dollars further
Petrol prices can play havoc with retirees on a tight budget – not so much because of high prices but more due to fluctuating prices, not only week to week but day to day.
Much of the price is outside anyone’s control, including government, with the two key components being the international benchmark price of oil and the value of the Australian dollar.
The international benchmark price, which can be affected by manufacturing costs, supply and demand, competition and geopolitical issues – it peaked at $US120 ($AU192) a barrel when Russia invaded Ukraine in 2002 and is currently trading around $US80 ($AU128) a barrel – is the key ingredient in the price.
With the oil price being set in US dollars, the buying power of the Australian dollar affects retail petrol prices. With the local dollar trading at a low 63 US cents, it’s making petrol more expensive for retirees.
But external factors are only part of the story. As the Australian Competition & Consumer Commission (ACCC) explains, petrol prices move up and down in patterns in Australia’s largest capital cities, decreasing steadily for a period followed by a sharper increase. It is a movement in the retail price from a low point (or trough) to a high point (or peak) to the following low point.
The ACCC emphasises that these cycles – they occur in Sydney, Melbourne, Brisbane, Perth and Adelaide – are the result of pricing policies and not from changes in the wholesale cost of fuel. By monitoring these cycles, which follow a regular pattern, it can help decide when to buy petrol – and save you dollars.
The difference between the lowest and highest price is up to 35 cents a litre – a difference of $17.50 for 50 litres. Over a year, it’s been estimated the saving can amount to $800.
Somewhat surprisingly, ACCC analysis indicates that, on average, public holiday price increases in the five largest cities are no larger than usual price cycle increases during the year. But they may be more noticeable before holiday weekends because so many motorists are making long trips and using more petrol than usual.
Other ways to save on your fuel bill are to benchmark the ACCC’s price cycle page and then fill up when the price is low. It sounds simple, and it is, but how many retirees do this little bit of homework before buying petrol?
Following this piece of advice is particularly pertinent when planning a long trip to avoid filling up when the price is high. Remember here are petrol price apps such as Petrol Spy, GasBuddy and Fuel Map that will help you find the cheapest price in your area.
While they are a marketing gimmick, don’t turn you nose up at the fuel discount coupons the major supermarket chains offer with their partner service stations for purchases of $30 or more.
The Western Australian government is also attempting to give consumers greater certainty with FuelWatch – it has been running for 15 years – where retailers must publish their prices for the next day by 2pm. The prices cannot be increased for 24 hours from 6am the following day.
Victoria is now following suit with legislation in the pipeline that will require fuel companies to publicly report their prices the day before they come into effect – and lock them in for 24 hours.
Such schemes don’t bring the price down. But they do bring greater certainty, so for retirees on tight budgets that’s got to be a benefit.
