Daniella Miletic

The days of petrol being below $1.30 a litre in Australia are coming to an end, economists have warned. Petrol prices are expected to jump within a fortnight because of skyrocketing US crude oil prices.

The anticipated surge follows a significant leap in oil prices on Monday when US crude rose $3.98 to settle at $49.20 a barrel – the most gains over three days since 1990.

Australian motorists have enjoyed three weeks of low petrol prices, with the national average price of unleaded falling by almost eight cents a litre over the past month. According to Australian Institute of Petroleum, the national average Australian price of petrol fell by 2.5 centres per litre to a 4-month-low of 130.9 cents a litre last week.

“The bottom line is that prices are low at the moment, and are probably going to stay low for the next fortnight or so but as we move through to mid-September and if these higher global oil prices are maintained we are going to see higher prices again,” CommSec economist Craig James said.

Figures from MotorMouth show that petrol prices have fallen even lower in Melbourne, in many instances priced just above the wholesale cost. Most major cities are experiencing usual price cycles, with only Perth operating on a weekly price cycle, which allows motorists to better identify the cheapest day for petrol during the week.

“Melbourne prices have been historically low, and this is the result of the discounting cycle extending through a bit longer,” said Mr James. “Motorists in Melbourne have done very well … when you have a look at the terminal gate or the wholesale price nationally it’s about $1.13 a litre and Melbourne prices last week were down to $1.17 a litre so it’s only just above the wholesale price.

But he warned the time of petrol prices around this mark was over and he expected average prices to climb in the next two weeks. “What we have seen overnight is that world oil prices have lifted sharply. Over the last three days we have seen a massive snap back in terms of the global oil price.”

So far the price of unleaded petrol across Melbourne on Tuesday has crept up to a high of $1.49 a litre, according to motoring group RACV. The average unleaded petrol price in Melbourne so far is 114.5 cents a litre and the lowest price is 111.7 cents a litre.

The motoring group recommends that motorists not pay more than 113.3 cents per litre today.

Extracted in full from smh.com.au