Shane Wright, 27 October 2015

Petrol prices across Perth could fall towards $1 a litre, delivering the State a much needed economic boost in the run-up to Christmas.

Figures from the Australian Institute of Petroleum show that the average price for unleaded petrol across the city fell to an eight-month low of 125.6¢ a litre last week.

It was a 3.3¢ fall over the previous week and since then prices have tumbled further. FuelWatch noted yesterday that the average price in Perth had fallen to 117.3¢ a litre, with some service stations offering motor-ists unleaded at $1.08 a litre.

The falls have been global because of a combination of slow demand out of China and continuing strong supply, keeping a lid on wholesale prices.

A barrel of crude oil is now selling for less than $US50.

Since the middle of the year, the average price in Perth has come down almost 17¢ a litre.

In the past year, petrol prices have dropped 25¢ a litre, delivering the average household a weekly saving of $30.

CommSec chief equities economist Craig James said wholesale prices were continuing to edge down in a development that would bring the bowser price closer to the $1.10 mark.

Factor in buying at the bottom of the weekly price cycle and discounts from some chains and motorists could be paying closer to $1 a litre.

“The decline in world oil prices is a net positive for consumers and businesses across the globe,” Mr James said.

“The terminal gate price is holding closer to $1.13 in some States, and if it continues to drift towards $1.05 a litre, we may start to see some opportunistic petrol retailers start offering the fabled $1 as a marketing ploy.”

The extra cash flowing into motorists’ pockets because of cheaper petrol will start to weigh on the Reserve Bank’s decision making.

In the past fortnight, the nation’s biggest banks have announced plans to lift their standard variable mortgage rates even though official interest rates have not moved.

On a $300,000 mortgage, the increases will add about $35 to monthly repayments.

Mr James said the move by commercial banks was a quasi-tightening on the economy.

“The national economy continues to improve but a rate cut before Christmas would help to boost activity across the nation,” he said.

Extracted in full from The West Australian.