Australia’s tradies, truckies, and delivery drivers are enjoying some cost relief, as the pump price of diesel comes down from high points across much of 2022.
As things stand, the average national price of diesel (182.5c per litre for the week ending July 16) is now lower than the average price of petrol (183.7c), according to the Australian Institute of Petroleum (AIP).
National bowser prices for diesel have come down by around 22 per cent from their peak periods recorded last year in July and October, compared to average prices at the time of writing this week.
To verify price changes we both averaged quarterly prices by state and territory using data from FuelPrice Australia and took national data from the AIP, whose figures broadly aligned.
At its worst points the national average price of diesel hit $2.36 per litre at the end of October 2022, with a similar price spike ($2.32) recorded in July 2022.
This means in a ToyotaHiLux with an 80L fuel tank, a refill of diesel today versus a refill in October 2022 on average would be about $40 cheaper.
Over the same period national petrol prices have also come down, but not to the same degree. They peaked at $2.04 a litre average in July 2022 and now sit at $1.84 – a reduction of around 10 per cent.
To put this into more context, petrol and diesel prices nationally (States vary) are roughly at parity depending where you shop, whereas in October the difference was $2.36 per litre for diesel versus $1.85 for 91 RON petrol – a near 30 per cent difference.
Petrol prices in Australia. Source: Australian Institute of Petroleum
The Russian invasion of Ukraine and subsequent international sanctions against Russia led to volatility in global oil prices last year in particular.
When we talk about petrol we refer to car usage for the most part. Only around 25 per cent of diesel is sold through retail outlets, the rest being used in heavy industry. This is partly why the price movements can look different, says the ACCC consumer watchdog.
However while demand cycles and use cases differ, in the longer-run both petrol and diesel are refined from crude oil and their prices broadly tend to follow similar patterns.
The price of Singapore Gasoil with 10 parts per million sulphur content (Gasoil 10 ppm) is the international benchmark for the wholesale price of diesel, and responsible for about half the cost. The other half comes from taxes (33 per cent) and other costs and margins (17 per cent).
According to the Australian Bureau of Statistics, a drop in diesel prices of 10.3 per cent over the March quarter of 2023 played a role in slowing the rate of inflation. Overall CPI rose 1.4 per cent across Q1 of 2023 whereas transport costs rose 0.6 per cent – all down to diesel prices.