Cuts to global supply coinciding with school holidays sends prices up to $2.38 a litre.

The price of petrol has hit record highs in Brisbane, with Sydney and Melbourne warned of price spikes to come, as cuts to global supply coincide with school holidays.

RACQ principal economic and affordability specialist, Ian Jeffreys, said Brisbane’s new peak price of $2.38 cents for a litre of regular fuel was the highest ever seen in the city, and outstripping current high prices of $2.29 a litre in Sydney and Melbourne.

He said the price spike began last Friday, when two petrol stations on the Bruce Highway in Burpengary – en route to the Sunshine Coast – broke the record before lowering prices later that day.

“And then on Monday morning enough of them decided ‘we want to push the price up’, and then the rest are starting to follow,” Jeffreys said.

Chris Ford, from Compare the Market said there was an unusually high 44c discrepancy between the most expensive and cheapest fuel in Brisbane on Wednesday.

“If you were filling up a 50-litre tank, you’d be saving $20 by filling up at the cheapest location versus the most expensive,” he said.

The citywide average price for in Brisbane was still $2.01, below Sydney’s $2.13 and Melbourne and Adelaide’s $2.21, but that wouldn’t last long, Jeffreys said.

“What we see is the expensive sites tend to cluster,” he said.

“So one site will jump and then the neighbouring sites will jump, and then those expensive clusters, over the course of those 10 days, will grow and the cheap clusters will shrink.”

Brisbane’s previous record price of $2.29 came on 24 August.

Jeffreys forecast that Melbourne and Sydney will soon follow suit and see average prices increase with long weekends in both cities.

The latest ABS figures show that petrol prices are up 13.9% compared with the previous 12 months, rising 9.1% in August alone.

KPMG chief economist, Brendan Rynne, said international prices were higher as a result of a decision by petrol cartel Opec, plus major producer Russia to cut supply.

The Australian dollar is also slightly weak at the moment, adding to prices, he said.

“We’re getting the double effect of increasing cost of petrol in the open market, also, having to pay for that at a lower exchange rate is therefore driving petrol prices,” he said.

Rynne said there is some good news in the medium term: petrol prices are likely to drop after this cycle, as northern Europe heads into winter.

“It does look like that the peak is now,” he said.

“Part of that will be an expectation that oil demand globally is probably going to soften over the coming six months, that tends to be the case when the northern hemisphere goes into winter.”

Extracted in full from: Brisbane faces record high petrol prices as Sydney and Melbourne warned of looming spikes | Brisbane | The Guardian