Petrol has soared to its highest price all year and experts are warning unleaded fuel could soon hit $2 per litre and linger there into next year.

Petrol prices have soared to their highest of the year and motorists are being warned they could reach a record $2 a litre within six weeks and remain until the New Year.

Unleaded fuel reached a peak of 183.9 cents in Melbourne, with 253 outlets selling petrol at the hefty price, according to data monitored by the RACV.

Evan Lucas, head of strategy at InvestSMART, said a strong demand for oil, combined with energy shortages in Europe could send the cost of fuel skyrocketing in the city to $2 a litre within six weeks.

He said it meant commuters would be paying for “record” prices as lockdown lifted, and well into the Christmas holidays.

Mr Lucas, who is an oil analyst, said high prices would last about two months and relief was reliant on what happened in overseas markets as they got through their winter.

“(The price) will certainly fall away in January and February, but leading into Christmas there is every chance that oil prices will probably be at a record for Australian consumers,” he said.

“The coming out of lockdown across the globe has been harder and faster than expected and has caught supply slightly off guard.”

RACV Head of Communications and Engagement Andrew Scannell said: “We have not seen any service stations selling above 180 cents per litre this year until the last few days”.

Caltex Gisborne was offering commuters in Melbourne the best bargain, with the cost of unleaded fuel at 139.9 cents per litre – a staggering 44 cents cheaper than the most expensive price.

Some of the city’s cheapest fuel could be bought between 144.1 and 149 cents per litre at Caltex/Safeway Northcote, Coles Express Balwyn, BP Footscray, 7-Eleven East Malvern, BP Little River (Geelong Bound) and Caltex/Woolworths Berwick.

The average price of petrol had hit 164.9 cents a litre on Thursday – and continued to rise throughout the day.

In the UK, a fuel crisis has led to the rationing of petrol supplies and the closure of service stations. A lack of truck drivers initially caused shortages, which sent motorists into a panic buying frenzy, in turn causing further supply issues.

Mr Scannell said RACV urged drivers not to pay above 149.9 cents per litre and reminded people to shop around for the best deal using its Fuel Tracker.

An Australian Competition and Consumer Commission spokesman said the increases were connected with the rising demand for crude oil due to economies around the world opening up after Covid-19 restrictions, in addition to supply issues.

“International refined petrol prices were around 46 Australian cents per litre at January … last week they had increased to around 80c per litre,” he said.

Extracted in full from: Petrol prices Melbourne: Fuel costs to soar to $2 before Christmas | Herald Sun