Economics

Australian gasoline prices are rising due to a decline in world production of crude oil and increasing demand among worldwide consumers. The increase in demand for petroleum products in Australia comes on the heels of unprecedented economic and traditional seasonal increases in consumption. The decrease in supply was orchestrated largely by the Organisation for Petroleum Exporting Countries (OPEC). It began in March 1999, when OPEC announced a decrease in production that cut world output by 3 per cent, or about 2.1 million barrels of crude oil daily, just after the Asian crises.

Increased demand and decreased production have resulted in higher prices for crude oil, which have been passed on to the consumer in higher petroleum prices. With the law of demand stating ...