The cost to fill up the car in Australia just got a whole lot cheaper, at least compared to recent standards, with the average petrol price tumbling by the most in a decade last week.

According to Commsec, citing data from the Australian Institute of Petroleum, the average unleaded price across the country fell 6.7 cents to 149.4 cents per litre, the largest weekly decline since late November 2008.

“The metropolitan petrol price fell by 8.8 cents to 145.9 cents per litre, and the regional price fell by 2.7 cents to 156.3 cents per litre,” said Ryan Felsman, Senior Economist at Commsec.

Across the capitals, Felsman said there were substantial declines recorded last week, especially in Adelaide where the average price tumbled by 19.2 cents per litre.

“Pump prices in Adelaide, Brisbane, Sydney and Melbourne all plunged, he said, noting the declines outside of Adelaide ranged from 8.8 cents to 9.6 cents per lite.

After rising to the highest level on record a week earlier, the average gross retail margins also declined by 3.2 cents to 16.20 cents a litre, helping to push prices lower than what would have otherwise been the case.

Combined with a large decline in the prior week, Felsman said the average unleaded petrol price has now fallen 11.1 cents from the decade-high struck in late October, helped by a sharp drop in crude oil prices and a modest rebound in the Australian dollar from multi-year lows late last month.

The good news is that he thinks there’s likely to be substantial near-term declines ahead given movements in regional wholesale gasoline prices in Singapore.

“The regional Singapore benchmark gasoline price has fallen by 21 cents a litre from recent highs and Australia’s wholesale petrol price has fallen by 15 cents, implying a further fall of around 5-7 cents a litre over the next fortnight, subject to the vagaries of the retail petrol price discounting cycle,” he said.

“The average motorist may now end up paying around $18 less to fill a 70 litre tank compared with the beginning of October.”

That’s likely to be welcome news for many Australian households given persistent weakness in incomes growth and falling property prices in many parts of the country.

Looking ahead, the longer-term outlook for prices remains uncertain with speculation already mounting that OPEC and its allies may cut crude oil production when the cartel meets in early December.

Saudi Arabia, the largest crude oil exporter globally, has already flagged that it will cut production levels by 500,000 barrels per day in December, contributing to a modest bounce in crude oil futures.

Should that move be followed by other cartel members it could see crude oil prices rally, a move that will be likely replicated in local petrol prices without a similar increase in the value of the Australian dollar.

Extracted from Yahoo FInance