Australian drivers are feeling the pinch at the petrol pump, with prices in some cities near four-year highs as international supply concerns drive up oil prices.
A report by the Australian Competition and Consumer Commission (ACCC) found average petrol prices across the five largest cities — Sydney, Melbourne, Brisbane, Adelaide and Perth — have dramatically jumped from April, after being broadly stable for the first three months of the year.
“Consumers have recently been paying around $1.60 [per litre] for petrol,” said ACCC chairman Rod Sims.
“These prices are higher than any time since mid-2014 in some cities.”
The ACCC pointed the finger at international factors pushing up wholesale petrol prices.
Middle East tensions, the potential for renewed US sanctions against Iran and concerns over Venezuelan supply sent crude oil prices to four-year highs in May.
Morgan Stanley analysts warned the fall in the Australian dollar could compound the impact of higher oil prices, all but wiping out the benefits of the Federal Government’s proposed income tax cuts.
However, the Organisation of Petroleum Exporting Countries (OPEC) is due to meet later this month along with Russia and could decide to ease the current cap on output, which would likely lead to lower oil prices.
CommSec thinks petrol prices may have peaked, after weekly price data from the Australian Institute of Petroleum showed a 0.1 cent fall in national average prices last week, to 153.3 cents per litre for unleaded petrol.
“The pump price should fall around 3 cents a litre to around $1.50 a litre in the next fortnight,” said CommSec chief economist Craig James.
“For further falls in petrol prices to occur, Saudi Arabia and Russia will need to be more definite about an easing of the production restraint agreement.”
In the meantime, the ACCC is advising Australian drivers to make use of fuel price websites and apps to shop around for the best price and avoid buying at the peak of the cycle.
“Our first industry report showed that retailers’ prices are not the same — retailers do price differently and have different strategies to get you to fill up with them,” Mr Sims said.
“Yesterday lunchtime, the available fuel websites and apps indicated that the range between the highest and lowest-priced sites was over 20 cents per litre (cpl) in Sydney and Adelaide, around 15cpl in Brisbane and Perth and around 10cpl in Melbourne.”
Sourced from ABC.net.au