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November, 2018 9:33 AM



Petrol prices at decade highs

Petrol prices at decade highs

According to the Australian Institute of Petroleum the national average price of unleaded petrol rose in the past week by 1.8 cents to 159.3 cents a litre...

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22.10.2018 03:38 PM

Petrol at decade highs, but relief ahead
Petrol prices

Unleaded petrol price: According to the Australian Institute of Petroleum the national average price of unleaded petrol rose in the past week by 1.8 cents to 159.3 cents a litre – the highest level for over a decade (highest prices since the week to July 27 2008).

Regional petrol prices: The Singapore gasoline price fell by almost 6 per cent last week. In Australian dollar terms, Singapore gasoline has fallen by 8.3 cents a litre in the past fortnight.

Wholesale prices: Australian wholesale fuel prices (terminal gate) have eased from recent highs. Unleaded petrol has fallen almost 5 cents a litre over the last 10 days with diesel down by almost 3 cents a litre.

What does it all mean?

The relief may prove to be only temporary, but the good news is that the key Singapore gasoline price has gone into reverse over the past fortnight while the Aussie dollar has stabilised. If prices hold at current levels, motorists could see relief of as much as 8 cents a litre in the next 1-2 weeks. This will be welcome relief as the national unleaded petrol price scaled decade highs in the past week, underpinned by the ending of the Sydney petrol discounting cycle.

In capital cities with a discounting cycle, petrol prices could fall as low as 143 cents a litre but may still be as high as 170 cents a litre when the discounting cycle ends. Average Australian unleaded petrol prices will hold $1.50- 1.60 a litre. Prices vary across the nation. Today the average Adelaide unleaded price is 147.3 cents/litre while the average Brisbane price is 163.3 c/l.

Filling up the car with petrol is the single biggest weekly purchase for most families. Higher petrol prices also affect nationwide inflation.

What do the figures show?
Petrol prices

According to the Australian Institute of Petroleum the national average price of unleaded petrol rose in the past week by 1.8 cents to 159.3 cents a litre – the highest level for
over a decade (highest prices since the week to July 27 2008).

The metropolitan petrol price rose by 1.8 cents to 159.1 cents per litre, and the regional price rose by 1.3 cents to 159.7 cents per litre. The gross retail margin rose by 3.0 cents to 13.80 cents a litre.

Average unleaded petrol prices across states and territories over the past week were: Sydney (up by 11.3 cents to 161.7 c/l), Melbourne (down by 1.0 cents to 153.4 c/l), Brisbane (down by 0.6 cents to 165.4 c/l), Adelaide (down by 10.7 cents to 152.0 c/l), Perth (up by 1.6 cents to 159.0 c/l), Darwin (up by 1.9 cents to 163.2 c/l), Canberra (up by 1.4 cents to 165.7 c/l) and Hobart (up by 0.4 cents to 164.4 c/l).

Today, the national average wholesale (terminal gate) unleaded petrol price stands at 142.7 cents a litre, down by 4.5 cents over the week. The terminal gate diesel price stands at 150.8 cents a litre, down by 2.6 cents over the past week.

The national average diesel petrol price rose by 1.4 cents to 164.7 cents a litre over the week. The metropolitan price rose by 1.4 cents to 164.9 cents a litre with the regional price up by 1.5 cents to 164.5 cents a litre.

Last week the key Singapore gasoline price fell by US$5.35 or 5.9 per cent to US$84.75 a barrel. In Australian dollar terms, the Singapore gasoline price fell by $7.28 or 5.8 per cent last week to $119.22 a barrel or 74.98 cents a litre.

MotorMouth records the following average retail prices for capital cities today: Sydney 163.1c; Melbourne 157.7c; Brisbane 163.3c; Adelaide 147.3c; Perth 152.3c; Canberra 166.0c; Darwin 163.2c; Hobart 163.4c.

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.

What are the implications for interest rates and investors?

In the September quarter, petrol rose around 1.5 per cent after lifting 6.9 per cent in the June quarter. So higher fuel prices are adding to inflation directly (at the pump) and indirectly (through transport costs).

Across the country there are more reports by businesses that they can’t find the staff they need. If the labour shortages lead to higher wages, selling prices may similarly start to lift. Already fuel prices have lifted and there is the potential for higher transport prices to be passed on in the food sector.

At present, CommSec expects interest rates to remain unchanged until late 2019. But we will be watching wage and price trends closely over coming months.

Published by Craig James, Chief Economist, CommSec
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