Fuel price falls better than an interest rate cut: Fitch

By business reporter Michael Janda Posted 37 minutes ago Fri 30 Jan 2015, 11:57am Discounted petrol in Perth drops below $1. Photo: Some petrol prices have fallen below $1 a litre in major centres. (ABC News: Graeme Powell) One of the world's leading ratings agencies says the fall in petrol prices has been better for household finances than an official interest rate cut. With average petrol prices falling by around a quarter over the past year, Fitch has estimated that the saving for the typical household using 40 litres a week is $61.38 a month. The ratings agency said that is equivalent to a 35-basis-point interest rate cut on the average mortgage balance of $210,625. The benefit is even bigger for those households with less owing on their mortgages, but households with large mortgages would still get more out of a rate reduction - the typical petrol price savings are only equivalent to a 15-basis-point cut on a $500,000 mortgage balance. Obviously, the savings from cheaper petrol only assist those who own a car, however that is a larger proportion of the population than those who still have a mortgage outstanding. The ratings agency said self-employed people may be getting an even bigger benefit, with many relying on a vehicle for work and using much more fuel than average. Fitch does caution that petrol prices are more volatile than interest rates, and savings can quickly be eroded if oil prices turn around and start heading higher. However, with petrol prices looking set to stay low for at least the first few months of the year, Fitch said cheaper fuel will help offset the usual post-Christmas debt hangover. "Fitch expects such an expense reduction to benefit Australian families in the first quarter of 2015, and to partially offset the negative impact of Christmas spending on mortgage delinquencies," the report noted. ======================= BHP workers set to lose jobs in South Australia to ‘safely reduce costs’ Olympic Dam. (AAP) Olympic Dam. (AAP) 9NEWS BHP Billiton has announced plans to cut jobs at the Olympic Dam operation for a restructuring process to help build a “viable business”. The number of workers set to be made redundant has not been confirmed but the company said a number of workers would be redeployed to other BHP operations. “Over the past few months, Olympic Dam has been focused on identifying opportunities to safely reduce costs in order to build a strong, viable business,’’ spokeswoman Emily Perry said in a statement. “A number of positions will be made redundant, however the impact of these redundancies will be minimised through some redeployments opportunities. We are unable to determine a net figure for workforce redundancies until the redeployment process is completed later this year. “Our priority is to support all affected employees and where possible, alternative positions will be offered. This will include roles required to support our growth ambitions in the Southern Mine Area as well as opportunities within the broader BHP Billiton organisation.’’​ Read more at http://www.9news.com.au/national/2015/01/30/12/18/bhp-workers-set-to-lose-jobs#RPDdYfUbUhOSXW3E.99 ==========================