According to the Australian Institute of Petroleum, the national average Australian price of unleaded petrol rose by 6.7 cents to 142.1 cents a litre in the past week – the largest increase in ten weeks.

Retail petrol margins increased: Last week the five-week average gross retail margin rose 0.76 cents to 13.52 cents a litre – the highest level in a month.

What does it all mean?

    • Last week, Aussie petrol prices rose by the most in ten weeks.  Aussie household budgets are being stretched as global oil prices rise, the Aussie dollar weakens against the greenback and retail margins increase.
    • Global oil prices continue to trade in a narrow range between US$60-70 a barrel.  A surge in US shale production continues to cap price gains, despite positive sentiment associated with supply cuts by OPEC and Russie.
    • Prices rose last week, however, to the highest level in two weeks.  Supply disruptions in the El Feel oilfield in Libya, together with upbeat comments from Saudi Arabia suggesting that the OPEC-led efforts to cut stockpiles are working supported prices.
    • And a surprise 1.6 million decline in US crude inventories at Cushing, Oklahoma pushed prices even higher.  However, Baker Hughes said the number of oil exploration rigs in the US rose for the fifth week to 799.
    • Over the week, the Brent crude oil price rose by 3.8 per cent to US$67.31 per barrel and the US Nymex price rose by 3.0 per cent to US$63.55 a barrel.
    • Another factor behind rising pump prices is the weaker Aussie dollar, which impacts prices as refined petrol is bought and sold in US dollars on global markets.
    • The Aussie dollar was down by 1.8 per cent last week against the greenback to US78.21 cents on February 23. And the Aussie has fallen by 3.1 per cent so far this month. The benchmark Singapore gasoline price rose by 3.5 per cent to US$97.43 a barrel or 58.97 cents a litre last week.
    • Retail petrol margins increased. Last week the five-week average gross retail margin (gap between the pump and terminal gate price) rose by 0.76 cents to 13.52 cents a litre – the highest level in a month.
    • The Australian Competition and Consumer Commission (ACCC) released its December quarterly report on the Aussie petroleum market last week. According to the ACCC the average gross retail margin is now more than four cents per litre higher than the average over the past 15 years.
    • And the average Gross Indicative Retail Differences (GIRDS) – or average gross retail margin – in the five largest cities were the highest on record at 12.2 cents per litre in calendar year 2017, up by 1.6 cents per litre from the previous year.
    • The ACCC confirmed that Brisbane motorists paid an average of 3.3 cents per litre more over the past eight years than other capital cities. The smaller cities of Canberra, Hobart and Darwin also paid more for petrol than drivers in Sydney and Melbourne.
    • Across capital cities prices remain stubbornly high in Darwin and Canberra. And prices have risen sharply in Melbourne and Brisbane. As feared, prices are approaching $1.50 per litre across most suburban areas.

    What do the figures show?

    • According to the Australian Institute of Petroleum, the national average Australian price of unleaded petrol rose by 6.7 cents to 142.1 cents a litre in the past week – the largest increase in ten weeks.
    • The metropolitan petrol price increased by 9.0 cents to 143.0 cents per litre and the regional price rose by 2.0 cents to 140.3 cents per litre.
    • Average unleaded petrol prices across states and territories over the past week were: Sydney (up by 9.0 cents to 143.0 c/l), Melbourne (up by 17.0 cents to 146.7 c/l), Brisbane (up by 20.8 cents to 148.1 c/l), Adelaide (down by 13.3 cents to 130.4 c/l), Perth (down by 0.5 cents to 137.1 c/l), Darwin (up by 0.3 cents to 149.6 c/l), Canberra (down by 0.2 cents to 148.1 c/l) and Hobart (up by 0.1 cents to 146.2 c/l).
    • The national average Australian price of diesel petrol fell by 0.1 cents to 139.0 cents per litre. The metropolitan price was unchanged at 139.8 c/l and the regional average price fell by 0.1 cents to 138.4 c/l.
    • Today, the national average wholesale (terminal gate) unleaded petrol price stands at 121.4 cents a litre, down by 2.7 cents over the week. The terminal gate diesel price stands at 122.1 cents a litre, down by 2.8 cents over the past week.
    • Last week the key Singapore gasoline price rose by US$1.20 or 1.6 per cent to US$76.20 a barrel. In Australian dollar terms the Singapore gasoline price last week rose by $3.27 or 3.5 per cent to $97.43 a barrel or 58.97 cents a litre.
    • MotorMouth records the following average retail prices for capital cities today: Sydney 136.7c; Melbourne 144.9c; Brisbane 148.3c; Adelaide 123.3c; Perth 127.2c; Canberra 148.0c; Darwin 149.7c; Hobart 141.3c.

    What are the implications for interest rates and investors?

    • Petrol prices have risen by the most in ten weeks and have potential to rise further.
    • The ACCC continues to oppose BP’s acquisition of Woolworth’s petrol station network in an attempt to preserve petrol price competition. However, BP is weighing up potential legal action.
    • CommSec expects official interest rates to remain on hold for some time.

By Ryan Felsman, Senior Economist, CommSec.
Phone: 02 9118 1805.  Twitter: @CommSec

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