Sliding Aussie dollar set to lift petrol prices.

Weekly petrol prices
Retail petrol: According to the Australian Institute of Petroleum, the national average Australian price of unleaded petrol fell by 0.5 cents per litre to 118.4 cents per litre in the week to May 22.

Regional petrol: In Australian dollar terms the Singapore gasoline price rose by $3.58 a barrel (4.5 per cent) to a near 7-month high of $83.99 a barrel or 52.82 cents a litre. Regional prices have lifted by 15.8 cents a litre in Australian dollar terms since mid-February lows.

The national average wholesale (terminal gate) unleaded petrol price stands at 111.2 cents a litre, up 4.2 cents a litre over the week.

What does it all mean?
Petrol prices continue to drift, holding around $1.18 a litre. However motorists are likely to see upward pressure to pump prices over the coming weeks. In effect it is a double-whammy of negatives. Not only have global oil prices lifted but the weakness in the Aussie dollar will add to higher petrol prices in coming weeks. In Australian dollar terms the Singapore gasoline price is now holding at 7-month high of $83.99 a barrel. Even the wholesale (terminal gate) price was up over 4 cents last week. Incrementally prices will lift by around 4 cents over the next fortnight.

As always, competitive factors, the discounting cycles and variable lags between wholesale and retail prices determine how capital cities and regional centres fare. But at present the key drivers of pump prices are the variations in the discounting cycle across the capital cities. In Sydney, prices spiked in the last couple of days, while prices in Melbourne ($1.16 a litre) and Brisbane ($1.21) have been falling for fortnight. In Adelaide ($1.07) prices have been falling for a fortnight and are now holding well below the wholesale price (when shopper dockets are used, prices are even lower).

Interestingly Darwin doesn’t have a discounting cycle and is probably a true reflection of where prices are. And when you compare average and Sydney petrol prices since the start of April, surprisingly prices were marginally cheaper in Darwin.

The national average petrol price will continue to drift higher from near the 115-120 cents a litre range to 120-125 cents a litre, but prices are still low in historical terms.

What do the figures show?
Petrol prices

According to the Australian Institute of Petroleum, the national average Australian price of unleaded petrol fell by 0.5 cents per litre to 118.4 cents per litre in the week to May 22. The metropolitan petrol price fell by 0.8 cents to 118.2 cents per litre while the regional price rose by 0.3 cents to 119.0 cents per litre.

The national average Australian price of diesel petrol rose by 1.4 cents to 115.0 cents per litre in the week to May 22. Last week the metropolitan price rose by 1.1 cents to 113.9 c/l, while the regional average price rose by 1.6 cents to 116.8 c/l.

Average unleaded petrol prices across states and territories over the past week were: Sydney (up 9.2 cents to 120.0 c/l), Melbourne (down 5.5 cents to 117.7 c/l), Brisbane (down 4.7 cents to 117.7 c/l), Adelaide (down 11.1 cents to 110.3 c/l), Perth (up 1.6 cents to 113.4 c/l), Darwin (up by 0.1 cents to 113.3 c/l), Canberra (up 0.2 cents to 115.5 c/l) and Hobart (up 2.8 cents to 120.4 c/l).

Today the national average wholesale (terminal gate) unleaded petrol price stands at 111.2 cents a litre, up 4.2 cents a litre over the week and now up 9 cents on the late April lows. The terminal gate diesel price stands today at 107.9 cents a litre, up 4.1 cents a litre over the week.

Last week the key Singapore gasoline price rose by US$2.10 or 3.6 per cent to US$60.80 a barrel. In Australian dollar terms the Singapore gasoline price rose by $3.58 a barrel (4.5 per cent) to a near 7-month high of $83.99 a barrel or 52.82 cents a litre. Regional prices have lifted by 15.8 cents a litre in Australian dollar terms since mid-February lows.

MotorMouth records the following retail prices for capital cities today: Sydney 127.4c; Melbourne 116c; Brisbane 120.9c; Adelaide 107.4c; Perth 108.6c; Canberra 112.5c; Darwin 113.1c; Hobart 121.1c What is the importance of the economic data?

Weekly figures on petrol prices are compiled by ORIMA Research on behalf of the Australian Institute of Petroleum (AIP). National average retail prices are calculated as the weighted average of each State/Territory’s metropolitan and non-metropolitan retail petrol prices, with the weights based on the number of registered petrol vehicles in each of these regions. AIP data for retail petrol prices is based on available market data supplied by MotorMouth.

What are the implications for interest rates and investors?
Filling up the car with petrol is the single biggest weekly purchase for most families. So the upward drift in petrol prices needs to be watched closely.

Extracted in full from The Bull.

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