Motorists in Sydney and Melbourne are being urged to fill up their tanks as petrol prices are expected to rise sharply by Christmas Day.

Australasian Convenience and Petroleum Marketers Association chief executive Mark McKenzie said savvy drivers could pick up a bargain amid the turn of the petrol cycle, with an “extraordinary” difference between the top and lowest prices in major cities.

This comes as the latest The Australian Financial Review/Freshwater Strategy poll, released on Monday, found cost of living was the single largest concern among voters,

Melbourne’s cheapest fuel on Tuesday was $1.66 a litre, according to PetrolSpy, while its most expensive was $2.16. Sydney had a bottom of $1.65 a litre and a top of $2.20.

Mr McKenzie said prices changed store by store, rather than by suburb, as individual outlets played a game of “discount leapfrog”.

One service station at Epping in Melbourne’s north had fuel for $1.67 a litre, with another outlet, just 500 metres away, selling for $2.16 a litre.

A Croydon Park outlet, in Sydney’s inner-west, was selling for $1.66 a litre, while a rival just 800 metres away was selling for $2.17.

The average price of fuel in Melbourne on Tuesday was $1.87 a litre, according to analytics group Informed Sources, while in Sydney, about a week ahead of Melbourne’s price cycle rise, it was $2.03. But Melbourne and Sydney prices could peak at an average of $2.10 a litre by Christmas, Mr McKenzie said.

“I would definitely fill up sooner rather than later. And make sure to shop around because there are bargains out there,” he said.

RACV spokeswoman Eleanor Colonico said drivers in Melbourne should avoid paying more than $1.73 a litre on Tuesday. She said fuel prices were calculated using a range of factors, including geographical area, availability, international benchmark prices, taxes, the value of the Australian dollar relative to the US dollar, and levels of competition.

NRMA spokesman Peter Khoury said independent retailers were more likely to trade on prices from the bottom end of the cycle for as long as possible.

But outside the state-based cycles, he added, there was an overall decline in prices following a fall in demand for oil after Organisation of Petroleum Exporting Countries and their allies announced they would cut production by 1.1 million barrels a day until the end of the year.

RACQ fuel expert Ian Jeffreys said the average price for regular unleaded petrol across south-east Queensland was $1.80 a litre. In Greater Brisbane, 33 per cent of stations were charging below $1.75 per litre for regular unleaded.

“South-east Queensland is entering the cheap phase of its fuel price cycle, and we expect prices to stay relatively cheap over the Christmas and new year period,” Dr Jeffreys said.

“It’s a great time to fill up and take advantage of this cheaper fuel, which is widely available.”

Oil prices climbed and shipping in the Red Sea was grinding to a halt after Iranian-backed Houthi militants stepped up attacks on vessels, raising fears about the impact of the Israel-Hamas war on the global economy.

European natural gas prices surged by as much as 13 per cent amid the most concrete sign yet of disruption to energy flows since the start of the war in Gaza. Brent oil futures jumped as much as 3.9 per cent.

Mr McKenzie said individual tankers held up due to the Red Sea attacks “won’t affect anything here”, but warned it could be a watch-point for traders.

The average fuel price in Adelaide on Tuesday was $2.02 a litre, according to Informed Sources, while it was $1.70 in Perth, $1.90 in Canberra, and $1.87 in Hobart and Darwin.

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