Belinda Cleary, 07 December 2015

Christmas has come early for motorists this week with the cost of fuel dropping sharply across the country.

Petrol prices could fall to as low as $1 a litre in Sydney and Melbourne this week according to motoring organisation NRMA – much lower than November’s average pump price of $1.25 a litre.

Prices are set to fall again after Christmas – just in time to give motorists something to celebrate over the new year.

NRMA spokesperson, Peter Khoury, told Daily Mail Australia the price will drop off this Monday and Tuesday before increasing again in time for Christmas.

“The average petrol price in Sydney is $1.13 per litre, and we think another cent or two will come out of that,” Mr Khoury said.

“We are talking $1 a litre in some places, and if not it will be very close.”

The best prices are currently being seen in Sydney’s south west, with $1.05 being recorded at an independent station in Narwee, near Bankstown.

“The area around Liverpool consistently has the best prices,” Mr Khoury said.

“There are a lot of independent service stations in that area, and they put downward pressure on the price.”

The last time Sydney saw petrol prices this low was during the Christmas period last year.

“It has come a bit early for Christmas this year, but it will drop again in time for the new year.”

The steady Australian dollar and depressed crude oil prices are to thank for the lower prices.

“It comes down to basic economics,” Mr Khoury said.

“OPEC has not cut supply, so there is a fair bit of oil on the market, if the supply is more than the demand it will push prices down.”

The NRMA recommends motorists keep a close eye on petrol prices over the next few days.

“Changes largely happen overnight. Things could change again.”

“If people can they should fill up today or tomorrow and then hold off from refuelling again until after Christmas.”

The current price cycle is expected to peak at an average of $1.30 per litre, but Mr Khoury says that the next cycle is predicted to fall even lower with an average price of $1.10 expected.

“The market is very volatile, so things could change, especially in the lead up to the Christmas period,” Mr Khoury said.

“We will be keeping an eye on it and letting consumers know if there are any changes.”

Melbourne’s average is currently $1.22, Canberra’s average is $1.24, Darwin’s average is $1.27, Hobart’s average is $1.33 and Adelaide’s average is $1.16, with prices expected to follow Sydney’s downward trend.

“Sydney and Adelaide generally see lower prices because they have more independent service stations,” Mr Khoury said.

Brisbane and Perth have already reached the lowest point in their cycles, dropping to an average of just over $1.17.

Prices in regional Australia will vary depending on the size of their market, however independent service stations consistently offer the best prices in a bid to compete against the larger providers.

Before last year’s Christmas period petrol prices had not dropped to below $1 per litre since 2005.

Extracted in full from the Daily Mail.