Caltex chief Julian Segal has warned that petrol prices are set to rise further from the three-year highs they are already sitting at, as recent crude oil prices flow through to Australian fuel costs.

National average pump prices of $1.46 per litre are the highest they have been since 2014, when oil prices were trading above $US100 per barrel.

But a decline in the dollar since then means international oil ­prices at current levels are translating into higher Australian dollar fuel prices.

Brent crude oil prices are trading at a 3½-year high of $US77.73 a barrel as President Donald Trump on Tuesday withdrew the US from a 2015 international agreement to curb Iran’s nuclear program, triggering a snapback of economic sanctions against the Islamic Republic.

“This is a long way away from the $US35-$US40 you had not so long ago,” Mr Segal said at Caltex’s annual meeting yesterday.

“You have doubled the price and the rate of exchange is going down. What you are seeing is a reflection of this.”

Mr Segal said there was a time lag on crude price changes flowing through to pump prices, meaning increased petrol prices were likely.

According to The Australian Institute of Petroleum, there is a one to two-week price lag between changes in Singapore fuel prices, which track crude movements, and Australian fuel prices.

Meanwhile, Mr Segal said new taxes and a lack of infrastructure were set to delay the infiltration of electric cars in Australia longer than many were expecting, extending the value of the refiner and fuel wholesaler’s extensive national supply chains. But the petrol distributer is preparing for the change and is in talks about ­installing charging units at its petrol stations as part of a retail overhaul in preparation for disruptive changes that will eventually hit the car industry.

Mr Segal said talk of cost parity between electric vehicles and internal combustion engines by 2024 failed to take into account a lack of power infrastructure and the fact that the government would resist the loss of billions of dollars in fuel excise duty.

“It’s not just about the cost, it’s about the range of the battery and the infrastructure you need to be able to charge these cars,” he told The Australianafter the company’s annual meeting.

“The electricity network is not capable today. You don’t have the ability, in terms of distribution infrastructure, to do it en masse — any transformer in the city would blow up.”

Mr Segal said the government needed to think about infrastructure and also the losses it was facing from fuel excise duties, which are levied at 41c a litre on petrol and diesel.

“We are one of the biggest tax collectors on behalf of the government in Australia in the form of excise,” he said.

“If you are going to go the electric vehicle way, the government will have to levy another tax.

“This is significant revenue for the government — billions of ­dollars will disappear from the budget.”

The Caltex boss said the lack of an equivalent tax on electric vehicles amounted to an effective subsidy. “Typically, the people who drive electric vehicles are not low-income people and yet they have the benefit of not paying the tax,” he said.

Mr Segal added Caltex was not against the introduction of electric vehicles and was preparing for a world of disruptive technologies.

“We are very much seeking new technologies,” he said.

Caltex has recently split its business into two units — fuels/infrastructure and convenience retail. As part of the revamp, Caltex is overhauling its retail stores under the Foodary brand.

In recent years, Caltex has closed its Kurnell refinery in Sydney and strengthened its refined fuel import capabilities.

Extracted from The Australian.

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