Australians have been hit with the third-highest increase in fuel prices worldwide since the start of the Iran war.
Since February, Aussies have paid an extra $550 per person at the pump on average, adding more fuel to the fire of RBA rate rise concerns.
The price jump is more than six times the global average of $85, with only Americans and Canadians forking out for bigger increases than Australian drivers.
The analysis, conducted by the Centre for Research on Energy and Clean Air (CREA), said the nation is particularly exposed to oil price shocks due to a high dependence on fuel.
“This war has deepened a cost-of-living crisis around the world, and Australian families are paying a particularly heavy price,” Secure Energy Project chief Leila Aly El Deen said.
Australia is a nation heavily reliant on fuel, of which it imports approximately 90 per cent due to only two domestic oil refineries remaining in operation.
This reliance is seen at an individual level, where cars are a major part of households due to limited public transport options outside most major cities.
But it occurs on a much higher level, too, with the costs then dripping down into the bowser and consumer pockets. As one of the most road-transport and freight-dependent nations in the world, many Australian sectors rely heavily on diesel to keep the supply chain running.
It’s exactly what we’ve seen since February, with the average retail petrol price across the country’s five major cities now sitting at 241.9 cents per litre (cpl) according to the ACCC’s weekly fuel price monitoring.
It’s a 1 per cent increase since last week, with the prices now sitting 71 cpl higher than what they were in February when the overseas conflict began.
Fuel price inflation putting pressure on RBA to lift interest rates
The effect on supply chains hasn’t gone unnoticed either, with inflation pushed to 4.0 per cent as the cost for transport, manufacturing and consumer goods all rose.
Motorists have been warned that relief isn’t expected any time soon, with the international oil benchmark, Brent crude, hitting its highest level since early this year.
The price of Brent crude per barrel settled at US$117 on Friday, following attacks in Saudi Arabia and an oil spill near the Strait of Hormuz.
This spike comes just days before the September quarter inflation report, which will be released on Wednesday. It will provide key insights into the Reserve Bank of Australia’s (RBA) next meeting in November.
CommSec equity market strategist James Gruber told News.com.au that the predictions for a rate rise next Tuesday have increased significantly.
“As of this morning, markets are pricing in a 65 per cent chance of a 25 basis point rate hike, up from just 23 per cent one week ago, though it’s been pretty volatile,” Gruber said.
Another 25 basis point rate rise would take the cash rate to 4.85 per cent, even higher than the 4.75 per cent level Australia saw following the global financial crisis.
Following the last RBA meeting in September, Governor Michele Bullock said the board would go as far as necessary to reduce inflation, spurring on the rate rise predictions even more.
Extracted in full from: https://au.finance.yahoo.com/news/australias-550-fuel-shock-exposed-amid-worrying-interest-rates-forecast-volatile-023051972.html
