The pain from the Iran War is not being felt equally across Australia. (Source: Getty)
Everyone knows the price of oil is up thanks to the war in Iran. As we enter May, the futures market is on fire, with delivery of barrels of oil being bid up to over US $120 – hitting the highest price since the big stand off in the Persian Gulf began.
But the price of oil and how it flows through to different refined fuels – and the Australian economy overall – comes at different speeds. Diesel is up much, much more than petrol, for instance.
This price difference means the crisis is hitting different parts of Australia differently. Families with a petrol car are suffering, while families with a diesel may be finding things particularly painful.
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Australians have been cutting back on buying new diesel cars, sales are down by 4.8 per cent compared to last year. But buying slightly fewer new diesels doesn’t mean the old ones are gone. They are out there, chewing up some of the most expensive fuel in the world.
Diesel driver are feeling the pain at the pump. (Source: Jason Murphy/aip.com.au)
Diesels are not spread out evenly. The data tell a very clear story – diesels stick together, geographically. Which means some parts of the country are getting hit far harder by this crisis than others. If everyone you hang out with feels like the sky is falling, it may be because you live in one of these areas.
So where are the diesel engines? A very timely new database of Victorian vehicle registrations tells the tale. The diesel donks are overwhelmingly in rural areas.
The top few areas in Victoria are those where diesels make up more than 60 per cent of the car fleet. And they are overwhelmingly rural. In Postcode 3483, in Buloke Shire, 68 per cent of registered vehicles are diesels.
The other end of the spectrum in Victoria is Caulfield North, a charming and wealthy suburban area. There just under 11 per cent of vehicles are powered by diesel fuel. And 4.5 per cent are electric. This pattern – rural diesel, city petrol and electric – is likely to repeat nationwide.
Diesel, by the way, is more energy dense than petrol per litre, arguably making it more efficient as a way of fuelling vehicles. It creates lower carbon emissions, but unfortunately tends to produce more particulate pollution. Think trucks spewing smoke.
The data published in such detail by the Victorian government lets us look not only at how many of each kind of car there are by location, but also how this is changing.
In some parts of the city, diesel cars are rare and growing rarer. In North Melbourne, a booming inner city suburb, and Kew, a leafy eastern suburb, diesels are being sold off fast. Most often they are replaced with South Korean and Chinese electric vehicles. Tax breaks make EVs very attractive for people in the top income brackets because they can pay off a novated lease with pre-tax income. ATO data shows the wealthiest are the primary beneficiaries of the scheme.
Diesel, petrol and electric are not the only fuels. Some old cars are still running on LPG. That’s by far the cheapest fuel in the country at the moment, and you can still find pockets where LPG cars are running. In particular, rural areas, where 1-2 per cent of cars still have a huge gas tank in the boot.
These are areas where the price of fuel will be hurting. But they are also the areas where the best way of avoiding the high price of fuel is unavailable. EV ownership is lowest in the areas where LPG cars are most common. The reason is obvious, really. A new EV costs money. And the people who need to save money most are not the same people who can pop out and buy a shiny new car.
EVs are clustered in richer suburbs – where people are avoiding petrol pain. (Source: Jason Murphy)
If we look at EV adoption, we can see that it correlates very nicely with wealth. For fun I’ve illustrated this with Mercedes ownership.
The recent swing in politics towards populism will only be aggravated by a situation where the wealthy are insulated from fuel price rises while the rich can drive using nothing but sunbeams.
It’s in all of our interests for cheap Chinese EVs to keep flowing into this country.
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