Petrol prices ease before Christmas as Russian sanctions threaten diesel disruption
By Sourced Externally
December 7, 2022
Australian motorists are paying lower petrol prices before Christmas, but global oil markets face fresh uncertainty as new sanctions on Russian exports could disrupt some fuel supplies.
Australia’s average national petrol price fell 6.1 cents per litre (cpl) to $1.81 in the past week as retailers offered fresh discounts, Australian Institute of Petroleum data shows.
Analysts said motorists are benefiting from lower oil prices and an approaching trough in east coast market cycles, but new Russian oil sanctions have caused further uncertainty.
Australia and G7 nations slapped a $60 price cap on Russian oil last Friday to punish the Kremlin for expanding its invasion of Ukraine.
Russian Deputy Prime Minister Alexander Novak responded over the weekend by raising the possibility of reduced oil supplies, saying Russia would only sell to nations that trade in open and free global markets.
Such a move could compound an earlier decision from oil bloc OPEC to push oil prices higher by reducing output, a tactic that was reiterated when the Middle East-led cartel met on Sunday.
Macquarie University senior lecturer Lurion De Mello said the impact of the sanctions would most likely be felt in diesel markets, which are more exposed than unleaded petrol to the price cap on Russian production.
“Most of Russian oil is produced into diesel,” he said.
“Diesel prices are already elevated, my biggest worry is the price will remain high and might even go up higher.”