Australian petrol prices soared last week, recording the largest weekly increase on record, according to analysis from Commsec.

Data from the Australian Institute of Petroleum (AIP) reveled the national average price of unleaded petrol jumped by 10.5 cents to 136.9 cents a litre.

The average metropolitan price jumped by 13.8 cents from a week earlier, substantially higher than the 3.9 cent increase seen in regional areas over the same period.

Commsec

Helping to explain the scale of the move in the metropolitan average, prices in Melbourne, Sydney and Brisbane — Australia’s largest cities — soared by 18.2 cents, 17.5 cents and 15.3 cents, lifting to 139.4 cents, 138.3 cents and 140.9 cents per litre respectively.

Prices rose by a smaller 9.7 cents and 2.2 cents respectively in Adelaide and Darwin but were largely unchanged in all other capital city markets.

“Petrol discounting cycles in southern and eastern mainland capital cities ended at the same time with prices peaking on February 19 or 20” said Craig James, Chief Economist at Commsec.

Along with cyclical movements at retail outlets, James says global factors also contributed to the sharp lift in prices.

“Oil prices are trading at their highest level since November 12,” he said.

“Investors have especially been encouraged by progress at the China-US trade talks and there has been further encouragement about prices with the decision of the US Federal Reserve to remain patient about changing monetary policy settings.

Evidence of reduced output at OPEC producers, following an agreement to reduce production made late last year, has also been a factor.

The lift in global crude prices has also flowed through to regional wholesale gasoline markets, James said.

“The Singapore gasoline price has lifted by over 12 cents a litre from the December lows in Australian dollar terms, although the price is still well down from the October 2018 highs.

“Similarly, the Australian wholesale price is up 11 cents a litre from lows to 123 cents.”

With the average retail price sitting at 136.9 cents a litre, the average retail profit margin rose sharply to 13.9 cents per litre.

While not great news for motorists, James says the start of the retail discounting cycle should see prices start to ease lower in the weeks ahead without a further steep increase in global crude prices.

“The super-cheap petrol prices on offer in recent weeks are unlikely to return in the near term,” he said.

“But at the upcoming low point of the discounting cycle, pump prices are likely to be closer to $1.20-$1.25 a litre.”

Extracted from Business Insider