According to the Australian Institute of Petroleum, the national average price of unleaded petrol rose by 4.9 cents in the past week to 142.8 cents a litre. The metropolitan price rose by 7.0 cents to 143.6 cents a litre and the regional price rose by 0.8 cents to 141.3 cents a litre.

Capital cities: Prices rose sharply in Sydney, Brisbane and Adelaide as discounting cycles ended.

Movements in the petrol price can affect consumer spending, and in turn, prospects for retailers.

What does it all mean?

• The terminal gate or wholesale unleaded petrol currently averages 129.4 cents per litre. Add to this the gross retail margin of 12 cents a litre and the pump price should be near 141 cents a litre. Prices in Canberra and Darwin are near this “average” price while Perth and Melbourne prices are lower than the “average” due to discounting cycles. Other capital cities have pump prices in the range 150-160 cents a litre – again due to the vagaries of the retail discounting cycle.

• The vagaries of the petrol discounting cycle were aptly displayed in the past week. After falling over 17 cents a litre in a three-week period, Sydney pump prices soared by a record 19.3 cents a litre. After recently paying near $1.30 a litre, suddenly Sydney motorists are now paying $1.50-$1.60 a litre. The volatility in the price of petrol would be making harder for families to do weekly budgets. In Perth, weekly changes in petrol prices in 2019 were between -4 cents to +5 cents a litre. Sydney weekly price changes varied from -14 cents to +19.3 cents.

• So where are global oil prices headed? The answer is complicated. The global economy has softened, trimming global demand for oil. But OPEC oil producers are being disciplined in efforts to match weaker demand with lower oil supplies. If global central banks continue to trim interest rates – and governments engage in fiscal stimulus – then this could serve to lift crude oil demand. The Iranian situation is also worth monitoring. There continues to be doubts about the free passage of oil tankers through the Strait of Hormuz. And this uncertainty is one of the factors serving to support oil prices.

• On Friday, the Brent crude price rose by US41 cents or 0.7 per cent to US$58.64 a barrel. And the US Nymex price rose by US40 cents or 0.7 per cent to US$54.87 a barrel. Over the week Brent rose by 0.2 per cent and Nymex rose by 0.7 per cent. Reuters also reported today that “prices rose after the drone attack by Yemen’s Houthi group on an oilfield in eastern Saudi Arabia on Saturday added to Middle East tensions. The attack caused a fire at a gas plant, but state-run Saudi Aramco said oil production was not affected.”

What do the figures show?

Petrol prices

• According to the Australian Institute of Petroleum, the national average price of unleaded petrol rose by 4.9 cents in the past week to 142.8 cents a litre. The metropolitan price rose by 7.0 cents to 143.6 cents a litre and the regional price rose by 0.8 cents to 141.3 cents a litre.

• Average unleaded petrol prices across states and territories over the past week were: Sydney (up by 19.3 cents to 151.3 c/l), Melbourne (down by 8.8 cents to 131.0 c/l), Brisbane (up by 19.4 cents to 155.2 c/l), Adelaide (up by 8.1 cents to 141.0 c/l), Perth (down by 0.6 cents to 139.1 c/l), Darwin (down by 0.3 cents to 139.3 c/l), Canberra (steady at 141.9 c/l) and Hobart (steady at 151.5 c/l).

• The smoothed gross retail margin for unleaded petrol fell from 12.62 cents a litre to 11.75 cents a litre last week (24-month average: 12 cents a litre).

• The national average diesel petrol price fell by 0.2 cents a litre to 147.4 cents a litre over the week. The metropolitan price fell by 0.1 cent to 146.1 cents a litre and the regional price fell by 0.2 cents a litre to 148.5 cents a litre.

• MotorMouth records the following average retail prices for capital cities today: Sydney 151.0c; Melbourne 130.1c; Brisbane 151.7c; Adelaide 160.3c; Perth 129.8c; Canberra 141.8c; Darwin 139.2c; Hobart 151.4c.

• Today, the national average wholesale (terminal gate) unleaded petrol price stands at 129.4 cents a litre, up by 0.1 cents over the week. The terminal gate diesel price stands at 134.2 cents a litre, down by 1.1 cents over the past week.

• Last week, the key Singapore gasoline price rose by US75 cents or 1.1 per cent to US$69.50 a barrel. In Australian dollar terms, the Singapore gasoline price rose by $1.40 or 1.4 per cent last week to $102.36 a barrel or 64.38 cents a litre.
What is the importance of the economic data?

• Weekly figures on petrol prices are compiled by ORIMA Research on behalf of the Australian Institute of Petroleum (AIP). National average retail prices are calculated as the weighted average of each State/Territory metropolitan and non-metropolitan retail petrol prices, with the weights based on the number of registered petrol vehicles in each of these regions. AIP data for retail petrol prices is based on available market data supplied by MotorMouth.

Extracted from The Bull