Institute of Petroleum (AIP), the national average retail diesel petrol price rose by 1.6 cents to 160.4 cents a litre over the week – the highest level in four years. The national average Australian price of unleaded petrol fell by 1.2 cents to 155.8 cents a litre – the second highest level in four years – according to the AIP. The petrol figures have implications for retailers, especially petrol marketing groups.
What does this mean?
Parts of rural Australia may have received some much-needed rain last week, but the cost of doing business on the land continues to increase. Already under pressure from the drought, diesel prices – one of the biggest input costs for farmers – have hit four-year highs.
Unleaded petrol prices are just below last week’s four-year high, but are still at the second highest level since July 2014. Pump prices are hovering around $1.60 a litre across the country. And there is unlikely to be any near-term respite for motorists returning home from the school holidays. The weaker Aussie dollar is increasing the cost of imported crude oil (purchased in US dollars), with the benchmark Singapore gasoline price also at fresh four-year highs. Household budgets are continuing to be stretched.
What prices are being paid state by state?
The metropolitan petrol price fell by 2.2 cents to 155.3 cents per litre, but the regional price rose by 0.7 cents to 156.9 cents per litre. The gross retail margin rose by 0.4 cents to 12.00 cents a litre.
Average unleaded petrol prices across states and territories over the past week were: Sydney (down by 7.0 cents to 154.1 c/l), Melbourne (down by 4.4 cents to 158.7 c/l), Brisbane (down by 2.7 cents to 149.3 c/l), Adelaide (up by 11.8 cents to 158.3 c/l), Perth (up by 1.8 cents to 155.1 c/l), Darwin (up by 1.3 cents at 158.4 c/l), Canberra (up by 2.5 cents to 162.8 c/l) and Hobart (up by 1.4 cents to 162.1 c/l).
Yesterday, the national average wholesale (terminal gate) unleaded petrol price stood at 145.8 cents a litre, up by 2.8 cents over the week to 4-year highs. The terminal gate diesel price stands at 151.3 cents a litre – a 4½-year high – up by 4.3 cents over the past week.
The national average diesel petrol price rose by 1.6 cents to 160.4 cents a litre over the week. The metropolitan price rose by 1.4 cents to 160.8 cents a litre with the regional price up by 1.7 cents to 160.1 cents a litre.
Last week, the key Singapore gasoline price rose by US$1.95 or 2.1% to near 4-year highs of US$93.50 a barrel. In Australian dollar terms, the Singapore gasoline price rose by $5.58 or 4.4 per cent last week to a 4-year high of $132.34 a barrel or 83.23 cents a litre.
Brent crude oil surged to four-year highs of US$86 a barrel in London trading last week, but has eased a little in recent days. Over the weekend, Saudi Arabia’s Crown Prince Mohammed bin Salman, pledged to increase production by around 1.3 million a day to offset expected declines in Iranian crude exports due to looming US sanctions.
It is hoped that a lift in OPEC and Russian crude output will eventually rebalance the oil market, placing downward pressure on oil prices. However, this is of little comfort to Aussie households paying around $1.60 per litre at the pump for both unleaded petrol and diesel prices – about the most in four years. The impact of rising petrol prices on headline consumer prices will be something to look out for later this month when the Bureau of Statistics releases its inflation data for the September quarter.
And as an aside, CommSec expects interest rates to remain unchanged until late 2019.
Extracted from Switzer