Australia duped by Trujillo

When Chief Executive Sol Truillo leaves Telstra, he will have pocketed more than AUD$33mil and AUD$5.6mil in shares for fours years of work. This is how the company has performed:

........................................2005 ___ 2006 ___ 2007 ___ 2008
Net profit ($bil)...............4.3 _____ 3.2 _____ 3.2 _____ 3.7
Share price (close)..........5.06 ____ 3.68 ____ 4.59 ____ 4.24
Sales revenue ($bil).......22.16 ____ 22.71 ___ 23.67 ___ 24.66

From what I can see, Trujillo has only managed to maintain status quo. Whatever marginal increase in revenue is negated by a reduction in net profit.

From a national perspective, despite running the largest telco company in Australia, he has not made any impact to the Australian telecommunications industry: in the last 4 years, internet prices remain at its high cartel-like level of 2005; internet speed remains lagging behind almost all the developed countries; telephone line rental has crept up marginally; and mobile phone call charges remain at an unabated staggering cost. Trujillo has not shaken up the industry. He has not introduced the price and performance competition the government had hoped for when privatising Telstra. Rather, it seems that Trujillo has tried his best to squeeze as much profit out of the market as he could get, without investing in state-of-the-art infrastructure. This is not the mark of a high-powered superexecutive leader-statesman who is rewarded handsomely for staying on the job, and rewarded yet again when he leaves one year before his 5-year contract is up.

LPG stimulus for the economy

Here's an idea that may help stimulate the economy. We all know that Australia is a big producer of natural gas. The cost at the pump is conservatively estimated at 40% the price of unleaded petrol. If the government were to use part of the $42bil stimulus package to help local car manufacturers develop affordable LPG-powered cars, and then sell them at a subsidized rate to the public, it will go a long, long way towards stimulating the economy:

1. A typical household spending $250 a month on petrol will be able to save $150 each month.
2. The local car industry will get a head start in developing LPG-powered cars for the export market.
3. Reducing the import of crude oil will save foreign exchange. At the same time, exporting gas-powered cars will create a bigger export market for Australia's natural gas reserve.

Finally, if the government were to control the price of LPG at the pumps, I am confident that the price can even be reduced further. I have been going to a certain petrol station to fill up on LPG costing 36.8c per litre. Today, all of a sudden, the price shot up to 49.9c per lit, more or less in line with every other bowser in town. This gas smells of a cartel rat.

My conversion to LPG - continued

Here's how my car performs on LPG (disregard the earlier claim!):

Refuel date___ km traveled___ litres used___ lit/100 km

Suburban driving
19/2/09 ___ 156 ___ 25.72 ___ 16.51
22/2/09 ___ 181 ___ 26.81 ___ 14.81

Driving to Adelaide
22/2/09 ___ 536 ___ 52.58 ___ 9.81
23/2/09 ___ 715 ___ 75.31 ___ 10.53

Gauging from the last column, the fuel consumption is more or less on par with what I get out of unleaded petrol, both for suburban driving as well as for long distance driving. Hence the savings with LPG is more or less dependent on the price of LPG with respect to unleaded petrol.

LPG price varies GREATLY between pumps. In Melbourne, most pumps are currently charging between 49.9-52.9c/lit, while the lowest goes for 36.8c/lit. In Adelaide, all the pumps I saw were charging 62.9c/lit (great cooperation between retailers?). Along way to Adelaide, the prices were all consistently higher: from 69.9c/lit to a whopping 73.9c/lit in Keith! Interestingly, petrol price does not vary much from Melbourne and all the way to Adelaide. Even in Keith where LPG was 73.9c/lit, the unleaded petrol was 128.9c/lit, which goes to show that LPG prices appears are highly out of control. Does "profiteering" cross your mind?

(added on 3 Mar 09) If you wish to make a complaint about unfair pricing, make a call to the ACCC - Australian Competition and Consumer Commission. I just did. The telephone number is 1300 302 502.

My conversion to LPG

It took me a long time to convince myself to convert my Camry to run on LPG (liquefied petroleum gas). Now that I have done it, I wonder why I had such a huge mental block about LPG. The bottom line is: on my first refuel today, I paid a mere AUD$16.20 to fill up the LPG tank after clocking 390km of regular driving. Normally I would have paid about AUD$65 at today's price of AUD$1.19 per litre of unleaded petrol.

It cost me AUD$299 to do the conversion, after deducting the AUD$2000 rebate given by the government. With a saving of AUD$50 per week, I can recover my investment in 6 weeks. What a deal!

Barring any unforseen problems, my first week of driving on LPG has been a pleasant experience. My Camry has a 2.4lit engine; I do not perceive any loss of power running on LPG. Driving is as smooth as it was on petrol. I give a full thumbs up to LPG! It feels good to know that I can fight back at the ridiculous prices the bowsers are still charging. Although crude oil has dropped to US$35 per barrel, we are stil paying AUD$1.19-1.29 at the pump for unleaded petrol.

Note: the price of LPG seems to vary greatly between bowsers. At this time, for example, most places charge 52c per litre, while a couple I have seen have been charging 38c per litre all through the week.