The price of petrol in Perth has plunged to its lowest level since January, providing some relief to households that have been battered by rising housing and food costs.

The average price of unleaded petrol across the metropolitan area will drop to 151.9 cents per litre on Tuesday – the cheapest day of the city’s fortnightly cycle.

It is the lowest average price since January 11 and comes as the global oil market cools in anticipation of a global recession.

The price will dip below $1.50 at more than 20 individual petrol stations on Tuesday, with the cheapest available ULP costing 145.7cpl a Liberty Beckenham and Liberty Banksia Grove.

While welcome, the bowser relief threatens to be short-lived with the Albanese Government already confirming the temporary halving of fuel excise, announced by former Prime Minister Scott Morrison in March, will come to an end as planned on September 28.

When the six-month discount ends, the price of petrol will rise by 22cpl practically overnight.

For the next month at least motorists appear set to benefit from petrol prices much closer to the long-run average of around $1.40 per litre.

Oil prices skyrocketed in February after Russia – a significant producer of the energy source – invaded Ukraine, prompting a raft of sanctions and trade restrictions against President Vladimir Putin’s regime.

But prices have moderated somewhat in recent weeks amid growing fears the world is heading towards a recession as a result of central banks aggressively hiking interest rates to combat rampant inflation.

China’s strict adherence to a COVID-zero policy is adding to those concerns, with major Middle Kingdom cities that house some of the world’s biggest factories facing the prospect of continued rolling lockdowns.

With the war in Ukraine far from over, oil prices are likely to remain volatile for the foreseeable future.

Russia is preparing to halt exports of natural gas into Europe for three days at the end of August, which is likely to cause a bump in oil prices given the two energy commodities tend to be closely linked.

Shortly after Russian troops first entered Ukraine the price of oil surged well over $US120 per barrel but that has now fallen to closer to $US90.

While still well above the decade-long average of around $US70 prior to 2022, the retreat in oil prices could not come at a better time for families grappling with rising mortgages and grocery costs.

Inflation in the year to June hit 7.4 per cent in Perth, compared to a national figure of 6.1 per cent.

A substantial part of the surge in living costs is a direct result of elevated fuel prices, with diesel one of the biggest input costs for transport companies that have been left with little choice but to pass on their heightened expenses to consumers.

The terminal gate price of petrol – the wholesale rate paid by major retailers such as United and Caltex Woolworths – was 151.9cpl on Monday.

That is the lowest it has reached since last October, although it includes the fuel excise discount set to be repealed at the end of September.

If the fuel excise remained at its usual rate of 44.2cpl – rather the current 22.1cpl – the wholesale price of petrol would currently be closer to 175cpl.

Extracted  in full form: Perth petrol prices: Fuel costs drop to lowest since January amid fears of global recession | PerthNow