Australian petrol prices fell to an eight-month low in the past week, bringing relief to motorists before the fuel-tax holiday expires in late September.
National average petrol prices fell 4.9 per cent, or 8.5 cents per litre (cpl), to 164.4 cpl over the week to Sunday, according to Australian Institute of Petroleum figures published on Monday.
Prices across Sydney, Melbourne and Brisbane continued to fall this week, with Motormouth figures showing pump prices averaging about 155 cpl.
It costs an average family about $230 a month to fill up their car, according to CommSec estimates, which is below the record $297.50 a month recorded in March.
But that is still $8 a month higher than at the start of 2022.
“At present, motorists in the major capital cities are getting a good deal on petrol,” CommSec senior economist Craig James said on Monday.
Prices are set to rise sharply when the federal government’s six-month petrol tax holiday expires at the end of September.
This will progressively add 25.3 cpl in taxes back onto bowser prices which, based on the current national average, would take prices back up to about 189 cpl.
This could be a “double whammy” for motorists, with east coast market cycles predicted to peak at the same time.
The outlook for global oil prices, a key factor for local pricing, remains uncertain as large producers cut back supply levels in response to easing demand.
Petrol prices plunge
The gap between wholesale petrol prices and retail pump prices has declined over the past week, suggesting service stations are passing on lower oil costs to motorists.
National petrol prices are 7.9 per cent below 12-month averages as the benefits of lower fuel taxes and an earlier easing in global oil prices flow to motorists.
National weekly prices in metropolitan areas fell by 11.1 cpl to 161.3 cpl, while those in regional areas fell 3.2 cpl to 170.7 cpl, according to AIP figures.
“Crude oil prices are around 30 per cent off the recent highs set in June, serving to restrain inflation rates around the world over July and August,” Mr James said.
The outlook for global oil prices is mired in uncertainty as the price relief flowing to Australian motorists begins to unwind across international markets.
Oil outlook uncertain
Oil prices rebounded towards the end of last week after OPEC+ – a group of major oil-producing nations including Russia – decided to cut daily production levels at its September meeting.
Commonwealth Bank commodities analyst Vivek Dhar said the cut would support higher oil prices, even though it was a relatively minor move.
That is because it signals that oil-producing nations may continue to cut their supplies if global economic headwinds continue to weaken demand for fuel around the world later this year.
OPEC+ is already producing less oil than its quotas, Mr Dhar said.
“Even factoring in future cuts to OPEC+ oil production, it’s likely that OPEC+ will still be producing less than it has promised.”
