Sydney petrol prices to play catch-up with 15 cent jump
Remember petrol at a dollar a litre? It happened in some parts of Australia for a brief time in February, but since then the national average price has risen nearly 30 per cent.
Australia’s average petrol price fell from a high of almost $1.60 a litre last July, to $1.08 in February, and back to $1.40 last week.
Now Sydney motorists are being warned to brace for a 15 cent per litre jump in the price of fuel this Friday as it becomes the latest capital to test fresh highs.
The NRMA said Sydney is just playing catch up with the price rises that have already happened across other capital cities.
“Most of the other capitals – Brisbane, Melbourne, Adelaide in particular – they have already hit that high point, that high-140 [cent] range average price, and they have now started to come down,” said the motoring organisation’s spokesman Peter Khoury.
“We’re yet to get there in Sydney.”
CommSec chief economist Craig James said it is international markets – oil and currency – that are pushing pump prices up.
“The oil price overshot on the downside, so instead of $US40 a barrel for Nymex it’s now up to $US60 a barrel,” he said.
“The other factor is the Australian dollar’s gone down from 82 cents to round about 76.5 cents.”
‘No evidence’ that oil companies are gouging motorists
While drivers might point the finger at the oil companies, pump price changes have been broadly in line with the benchmark Singapore petrol price, which accounts for 20 per cent of Australia’s imports.
In the six months to February the wholesale margin narrowed to almost nothing, then expanded again to around 10 cents a litre last week.
“We just can’t find any evidence that oil companies are doing the wrong thing by motorists – if anything, in Sydney this week we had prices pretty much close to the wholesale price, so you couldn’t get it much cheaper than that,” added Craig James.
However, after rising earlier this year, a recent dip in oil prices is again dragging the wholesale petrol price a little lower.
“There’s no direct link between the two, but we are seeing wholesale prices dropping at the moment, and that’s something we would expect retailers would pass on to motorists,” said the RACV’s Nick Platt.
The average household was saving $60 a month when petrol prices hit their low point in February, as much as a 35-basis-point interest rate cut.
Since then most of that benefit has been wiped out, and it is an extra cost to business too at a time when the economy is still far from top gear.
“Certainly a lot of that benefit has dissipated, but I suppose the good news for motorists is the price of petrol is cheaper now than what it was 12 months ago, and there is still a gain to be applied,” said Craig James.
Mr James expects the national average petrol price to go sideways for the next few months.
However, motoring groups warn there will still be sharp peaks and troughs because of the petrol discounting cycle.
“It’s not uncommon for the gap between the wholesale and the retail price to be as much as 20 cents a litre at the high point of the cycle, the oil companies are making a fair whack when that is the case,” observed the NRMA’s Peter Khoury.
Nick Platt said those cycles are getting longer than the old weekly price peaks and troughs.
“In the past we’ve seen weekly cycles, but that hasn’t been the case for some time now,” he observed.
“We’re getting cycles that are longer than that now, perhaps up to three weeks.”
Just like a dollar a litre petrol, the predictable weekly cycle has also gone the way of the horse and buggy.
Extracted in full from ABC.