Australia’s treasurer has warned fuel prices might not fall until the end of the decade.
Jim Chalmers made the comments on Friday at the ‘Citi A50 Australian Economic Forum’, an invite-only event of leaders from government, business, superannuation funds, and investment firms.
“Oil has been above $100 a barrel most of the last 6 weeks, $110 this week, and futures aren’t expecting a return to pre‑conflict prices until 2030,” Chalmers said.
The ‘futures’ referenced by the treasurer are contracts traded by investors to buy or sell oil at an agreed price on a future date.
“Well, obviously, we- I share the Treasurer’s views. Obviously, as soon as the war in the Middle East return- finishes petrol prices and diesel prices would return to more normal levels, but there’d certainly be an overhang because there has been impacts on infrastructure in the Middle East, and as we’ve always said, it will take some time,” Bowen said.
“The sooner the war finishes, the better, and then it would take some time to recover, and there’ll be impacts for some time to come.”
Bowen made the comments on Saturday during his weekly update on Australia’s fuel supplies, which he said remained unconcerning.
“Australia has 39 days worth of petrol, two days less than last week’s update, 31 days worth of diesel, also two days less, and 28 days worth of jet fuel, which is the same as last week’s update” Bowen said.
“We have 45 ships on the way to Australia with fuel, and three billion litres of fuel locked in to be delivered over the next four weeks. So in the face of the ongoing international uncertainty, Australia’s fuel security remains solid.”
Oil prices surged in late March after war in the Middle East prevented oil and fuel passing through the Strait of Hormuz, a key waterway for ships departing from oil-rich Gulf countries such as Saudi Arabia.
However as the war drags on, more lasting damage has been done as oil infrastructure continues to be destroyed, extending impacts on global oil supply beyond the war’s end.
The rise in fuel prices has been a boon for electric vehicle sellers Down Under, with sales of new electric vehicles now overtaking petrol-only cars for two consecutive months.
If fuel prices are expected to remain high through the end of the decade, interest in electric vehicles could be sustained.
Earlier in the year, the government reduced fuel prices by temporarily halving the fuel excise tax, before steadily reinstating it.
However, despite fuel prices remaining high, there is no guarantee that the government will intervene to lower fuel prices once more. Various senior ministers, including Deputy Prime Minister Richard Marles, have generally dampened expectations for future fuel price relief, but have not ruled anything out.
Extracted in full from: https://www.drive.com.au/caradvice/fuel-prices-to-stay-high-until-2030-says-treasurer/
