Squeeze on motorists as petrol prices hit $2 in February
By Sourced Externally
February 14, 2023
Australian motorists are copping near-record petrol prices again.
National average petrol prices rose 4.1 cents last week to 183.7 cents per litre (cpl) to be well above the three-month average, according to data from the Australian Institute of Petroleum (AIP) published on Monday.
The gap between wholesale and retail petrol prices has risen to a multi-month high of 13.5 cpl, meaning service stations’ margins have widened.
Motorists in Sydney are copping the worst of the latest price squeeze, with averages across Australia’s largest city topping $2 a litre over the weekend, according to real-time fuel data from MotorMouth.
Bowsers have reached 192 cpl in Melbourne and 180 cpl in Brisbane, according to MotorMouth, capping off a three-week series of hikes that have seen prices across the major capital cities rise 10 per cent.
‘Shop around’ advises ACCC
The Australian Competition and Consumer Commission (ACCC) is advising motorists in the big capitals to “shop around” and find retailers that might not have raised their prices.
Either way, prices are likely to rise further in the coming days before peaking, with the National Roads and Motorists Association (NRMA) saying bowsers across New South Wales could average almost $2 very soon.
“Average regular unleaded prices rose 17.6 cents per litre last week, rising to the top of the next cycle, and should reach the high 190s cents per litre this week,” NRMA said in a statement.
Motorists in smaller capital cities, including Adelaide and Perth, are being advised by the ACCC to buy petrol now because prices are still sitting closer to the bottom of their cycles.
Prices in Adelaide fell 18.2 cents on average last week to $1.70 cpl, while those in Perth fell 2.8 cents to $1.68 cpl.
When will prices fall?
The current peak in east-coast petrol prices comes despite a sizeable fall in wholesale costs in the past week.
The national average wholesale (or Terminal Gate Price) for petrol was down 3.1 cents last week to 170.2 cpl, the latest AIP data found.
This isn’t out of the ordinary because retailer margins typically expand when price cycles peak, with the current spate of increases having taken three or so weeks to materialise after bottoming out over Christmas.
Price should start to come back down towards the end of February as smaller retailers undercut major chains.
There are ominous signs for global oil prices in 2023 that threaten to push up prices, with Russia responding to price caps for its oil by pledging to cut production.
Russia responded to western sanctions over the weekend by announcing a cut to its production of 50,000 barrels a day from March.
That equates to about 0.5 per cent of globally supply, and about 5 per cent of Russian output.
The announcement pushed up the price of Brent crude, an international benchmark for oil prices, modestly over the weekend – by about 2.2 per cent to $US86 per barrel.
“We will not sell oil to those who directly or indirectly adhere to the principles of the price cap,” Russia’s Deputy Prime Minister Alexander Novak said.