Quote:
Originally Posted by Kato
Mindsets have been changed.
$1.40-1.50 is the average price for 98 RON. Cheap fuel (98 RON) is now $1.40/L.
Prices won't fall now that consumers are used to these prices.
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Absolutely correct.
Does anyone remember a number of years ago when we first started seeing spikes to $1.50 a litre, and they were talking about the price going up to over $2.00 a litre? It was the head story on the news every night for weeks and weeks at a time, in the papers, etc etc. This is about the time that the government started subsidising gas conversions for vehicles.
Fast forward 5-6 years.. and it doesn't even cop a mention at the exact same price point, because people are used to it, and even then its not by choice.. its because they really don't have another alternative to fuel do they?
Google "Price Elasticity of Demand".. it explains all. I don't think any other product on earth is as "inelastic" as fuel (except for cigarettes).