According to the Australian Institute of Petroleum, the national average Australian price of petrol rose by 1.4 cents to 138.3 cents per litre in the week to May 24 – a six-month high.
The metropolitan petrol price rose by 1.1 cents to 138.4 cents per litre (c/l) and the regional price rose by 2.0 cents to 139.7 c/l.
The national average Australian price of diesel petrol rose by 0.5 cents to 132.9 c/l, with the metropolitan price rising by 0.3 cents to 131.4 c/l and the regional price increasing by 0.5 cents to 134.0 c/l.
Average unleaded petrol prices across states and territories over the past week were:
- Sydney – up 1.0 cent to 138.9 c/l
- Melbourne – up 2.2 cents to 137.0 c/l
- Brisbane – up 4.0 cents to 142.2 c/l
- Adelaide – down by 8.0 cents to 132.9 c/l
- Perth – up by 0.2 cents to 136.8 c/l
- Darwin – up by 0.6 cents to 136.2 c/l
- Canberra – up by 5.2 cents to 144.2 c/l
- Hobart – up by 0.3 cents to 142.5 c/l
The Singapore gasoline price, a key petrol pricing benchmark for Australia, rose by US35 cents, or 0.4%, to US$85.65 a barrel.
Singapore gasoline previously hit a near six-year low (lowest since March 2009) of US$52.20 a barrel on January 13.
In Australian dollar terms the Singapore gasoline price rose by $2.05 a barrel, or 1.9%, last week to $108.10 a barrel or 67.99 cents a litre. In Australian dollar terms, the Singapore gasoline price has lifted by 37 cents from the mid-January lows.
What are the implications for interest rates and investors?
Filling up the car with petrol is the single biggest regular weekly purchase for most families (households) ahead of fast food and restaurant/café purchases (weekly food/grocery shopping covers a raft of individual items).
So the fall in the petrol price in late 2014/early 2015 was good news for family budgets and for consumer confidence. However since bottoming out, fuel prices have lifted substantially. The average family is now paying over $35 more a month on petrol compared with three-and-a-half months ago. The lift in the petrol price has the potential to curb retail activity in coming months.
The Reserve Bank has an implicit easing bias and may cut rates again if there is no significant improvement in business investment. The economic growth and inflation forecasts suggest a sluggish Australian economy over the coming year.
Interestingly, movements in the Australian dollar will have more of an impact, not just on petrol prices over coming months, but also the outlook for interest rates.
Extracted in full from MyWealth Insight.