Petrol prices sank to their lowest levels on record across Australia’s five largest cities in April as travel restrictions and global oversupply triggered a stunning crash in the cost of crude oil.

As coronavirus lockdowns gutted oil demand and prices all around the world, new statistics show the impact flowed through to the bowsers and led to drivers paying an average 102.6¢ a litre in Sydney, Melbourne, Brisbane, Adelaide and Perth. The national consumer watchdog said this was the lowest inflation-adjusted monthly price since retail price-monitoring began in May 1991.

“The sharp fall in petrol prices in the first few months of the year was good news for most Australian motorists,” Australian Competition and Consumer Commission chair Rod Sims said.

Benchmark oil prices suffered their sharpest fall on record in March after the onset of a price war between top oil-producing nations Saudi Arabia and Russia brought greater supply into a market suffering from the impact of coronavirus on demand. The global Brent price used in Australia fell to two-decade lows below $US30 a barrel in March, and American benchmark West Texas Intermediate briefly sank into negative territory in April.

Mr Sims said international refined petrol prices usually took “a couple of weeks” to be reflected in retail prices in larger capital cities, and took longer in small capital cities and regional areas.

“Due to a substantial reduction in demand for petrol in Australia associated with COVID-19 restrictions, it took longer than normal for prices to come down because it took retailers longer to turn over existing volume bought at a higher price,” he said.

In April, petrol sales volumes across Australia were 43 per cent lower compared with monthly average sales in calendar year 2019, according to the ACCC.

Viva Energy, which runs Australia’s network of Shell-branded fuel stations and the Geelong oil refinery, said government travel restrictions to arrest the spread of COVID-19 had “significantly impacted demand for fuel”.

“Sales of jet fuel fell 73 per cent as international and domestic border restrictions were put in place and sales in our retail alliance business declined between 30 per cent and 40 per cent at the height of the crisis in April,” Viva chairman Robert Hill said on Monday.

“Retail sales have begun to recover as restrictions have been relaxed and domestic flights are beginning to return.”

In April, petrol sales volumes across the nation were 43 per cent lower compared with monthly average sales in calendar year 2019.

Between January and the end of May 2020, weekly average retail petrol prices decreased by at least 40¢ per litre in almost half of the regional locations covered during this period of increased ACCC fuel monitoring.

However, prices in some regional locations were slower to fall and remained high in a number of towns, according to the data.

“Average prices in Cloncurry, Mount Isa, Emerald, Cunnamulla and Forbes only fell by around 20 cpl (cents per litre) or less between January and May and have not changed much since then,” Mr Sims said.

Extracted in full from: https://www.smh.com.au/business/the-economy/pandemic-drove-australian-petrol-prices-to-record-low-20200706-p559dw.html