Saudi oil slash + 25cent subsidy off petrol = inflation nightmare for Adrian Orr
Saudi Arabia slashes oil production and threatens to do ‘whatever is necessary’ to boost prices
Saudi Arabia will reduce how much oil it sends to the global economy, taking a unilateral step to prop up the sagging price of crude after two previous cuts to supply by major producing countries in the Opec+ alliance failed to push prices higher.
The Saudi cut of 1 million barrels per day, to start in July, comes as the other Opec+ producers agreed in a meeting in Vienna to extend earlier production cuts through next year.
The problem with Orr’s capitulation to the market with his puny 25 point rise and his refusal to allow monetarism to allow the Government to shirk their fiscal responsibilities any longer by claiming inflation has peaked is that it’s a big gamble.
The big reason inflation dropped in the last quarter was because of softening petrol prices driven by Biden tapping the strategic reserves plus the true cost of China rapidly reopening after Covid has seen sluggish economic sentiment and a looming debt implosion.
OPEC responded to that with a series of cuts they have now extended which will coincide with the 25cent subsidy coming off next month.
On top of that we have an unprecedented 100 000 migrants arriving plus the damage to our horticultural sector that will send food prices into the stratosphere.
Orr’s bluff to make the Government tax more or spend less by claiming inflation has peaked when it is about to explode again will not win Orr any friends.
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The 25c plus GST hike in fuel, mid cost of living crisis, was going to hurt big time. Now all the worse!
I’m the great game of brinksmenship and poker who exactly is playing there cards at random?
The inflation megatrend is far from over. The notion that Orr has finished with increasing interest rates is delusional nonsense (and further pumped by the garbage MSM who either have their heads in the sand or are deliberately falsifying the reality). Orr should resign since he has, imo in bad faith, told NZers that this last hike was it. It isn’t, because he has a mandated obligation to curb inflation. He has to hike (which I think will be 8-10+% before this is over).
So thousands more poeople will be made umemployed, homeless or plunged into severe hardship because rich pricks like you want a cheap latte.
I would have interest rates permanently at 3% I think we should have inflation, as it keeps wages high and ensures funding for social services.
If inflation is kept low, no one has any money.
And yet still nobody (except Steve Keen) is talking about an orderly write-off of the unpayable debt — which would allow you to finally normalise rates, without a huge crash or endless years of inflation.
Pfft what cost of living/fuel crisis. Roads, shops, pubs and cafes busy as usual, this long weekend.
I just don’t understand why making Saudi princes’ New Zealand mortgages more expensive hasn’t brought down inflation.
Shocked I tell ya.
The country could fight inflation by buying cheap Russian oil from India or cheap commie crude from Venezuela.
That might work if we had an oil refinery, except that our US friends would organise a coup if we tried.
Having interest rates kept low ensured that people could afford their mortgages, have and keep jobs and earn high wages.
Unfortunately, Rich pricks like you resented that. People like you think wages should be low and people should pay more than 70% of their income on housing because people should suffer and pay penance