The Bull

Thursday 18

October, 2018 8:52 PM



Fuel prices fall

Fuel prices fall

The national average diesel price fell for the seventh straight week, down by 0.6 cents to 152.4 cents a litre ? the lowest level in 10 weeks.

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31.07.2018 03:57 PM

Diesel prices the lowest in 10 weeks
Weekly petrol prices; New home sales

Diesel price: The national average diesel price fell for the seventh straight week, down by 0.6 cents to 152.4 cents a litre – the lowest level in 10 weeks.

Unleaded petrol: According to the Australian Institute of Petroleum, the national average Australian price of unleaded petrol fell by 2.9 cents to 146.7 cents a litre in the past week – the fourth decline in the past five weeks.

New house sales lift: In seasonally-adjusted terms, new detached house sales rose by 2.2 per cent in June – the first monthly increase in six months. However, sales fell by 5.3 per cent over the year.

What does it all mean?

Aussie farmers are doing it tough at the moment with large swathes of the country ravaged by drought. And the cost of doing business for people on the land is being keenly felt. However, in a positive development one of the biggest input costs - fuel - is the cheapest in 10 weeks. The average price of diesel fuel has fallen for seven consecutive weeks.

And the good news for Aussie motorists continues. The national petrol pump price fell last week and has fallen for four out of the past five weeks. Sydney, Melbourne and Brisbane drivers are benefiting from falling prices with the retail petrol price discounting cycle in full swing across most suburbs in those cities. Adelaide motorists can expect some respite over the coming weeks as prices peak over the next few days.

Global oil prices remain volatile. Last week Brent crude oil prices rose for the first time in four weeks, lifting by 1.7 per cent to US$74.29 a barrel. But the US Nymex oil price fell by 2.5 per cent to US$68.69 a barrel amid ongoing trade tensions, rising geo political risks, OPEC oversupply concerns, fluctuating Chinese demand and falling US inventories. The benchmark Singapore gasoline price lifted to its highest level in six weeks. 

What do the figures show?
Petrol prices

According to the Australian Institute of Petroleum, the national average Australian price of unleaded petrol fell by 2.9 cents to 146.7 cents a litre in the past week.

The metropolitan petrol price fell by 3.6 cents to 145.6 cents per litre and the regional price fell by 1.4 cents to 149.0 cents per litre. The gross retail margin fell by 0.9 cents to 14.22 cents.

Average unleaded petrol prices across states and territories over the past week were: Sydney (down by 9.9 cents to 138.6 c/l), Melbourne (down by 6.2 cents to 146.8 c/l), Brisbane (flat at 151.9 c/l), Adelaide (up by 9.5 cents to 142.5 c/l), Perth (down by 1.1 cents to 145.7 c/l), Darwin (flat at 156.6 c/l), Canberra (down by 1.1 cents to 153.9 c/l) and Hobart (down by 0.1 cents to 158.5 c/l).

Today, the national average wholesale (terminal gate) unleaded petrol price stands at 133.6 cents a litre, up by 1.8 cents over the week. The terminal gate diesel price stands at 136.5 cents a litre, up by 1.3 cents over the past week.

The national average diesel petrol price fell by 0.6 cents to 152.4 cents a litre over the week. The metropolitan price fell by 0.8 cents to 152.4 cents a litre with the regional price down 0.5 cents to 152.4 cents a litre.

Last week the key Singapore gasoline price rose by US$2.91 or 3.6 per cent to US$84.76 a barrel. In Australian dollar terms, the Singapore gasoline price rose by $3.73 or 3.4 per cent last week to $114.71 a barrel or 72.15 cents a litre.

MotorMouth records the following average retail prices for capital cities today: Sydney 134.8c; Melbourne 139.9c; Brisbane 144.7c; Adelaide 152.2c; Perth 134.8c; Canberra 153.0c; Darwin 156.6c; Hobart 158.6c.

New home sales

In seasonally-adjusted terms, new detached house sales rose by 2.2 per cent in June – the first monthly increase in six months. However, sales fell by 5.3 per cent over the year.

The Housing Industry Association reported that the volume of detached house sales rose in all states except Victoria (down 0.4 per cent). Sales increased in NSW (up 8.3 per cent), Queensland (up 2.7 per cent), Western Australia (up 1.5 per cent) and South Australia (up 0.2 per cent).

No data was published by the HIA for multi-unit sales.

What is the importance of the economic data?

Weekly figures on petrol prices are compiled by ORIMA Research on behalf of the Australian Institute of Petroleum (AIP). National average retail prices are calculated as the weighted average of each State/Territory's metropolitan and non-metropolitan retail petrol prices, with the weights based on the number of registered petrol vehicles in each of these regions. AIP data for retail petrol prices is based on available market data supplied by MotorMouth.

The Housing Industry Association releases data on the sales of new homes each month. The HIA collects the data each month from a sample of Australia's largest 100 home builders. The survey covers around 15 per cent of the home building industry.

What are the implications for interest rates and investors?

Diesel prices are easing at a time when our struggling farmers need it most. And metropolitan motorists in our larger cities are benefiting from the retail petrol price discounting cycle. But now is not the time to be complacent. Global crude oil prices are volatile and last week’s increase in both the Brent crude oil and Singapore gasoline prices signal potential price rises ahead.

CommSec expects interest rates to remain unchanged until at least early 2019.

Published by Ryan Felsman, Senior Economist, CommSec
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