Petrol prices continued to rise over the past week and are now about $2 a litre, before an expected dip in the lead-up to Christmas.
Australian Institute of Petroleum (AIP) data published on Monday revealed national average petrol prices rose 1.5 per cent in the past week to 198.9 cents per litre (cpl), capping off a month of massive increases after the federal government’s fuel tax holiday expired.
Average prices across Melbourne, Brisbane and Sydney are hovering around $2 a litre, according to MotorMouth data that suggests a pre-Christmas downwards trend is starting.
It’s likely that capital city petrol prices will continue falling in coming weeks as east coast market cycles begin to ebb, delivering motorists bowser relief in the weeks before Christmas Day.
But with uncertainty over oil prices and another upswing in market cycles looming, it’s unclear what motorists will be paying over the holiday period six weeks out from the seasonal rush.
Petrol prices peak
Australia’s petrol prices are unique in that major east coast markets experience massive shifts in price based on a regular cycle of discounts and price hikes that occurs every four to six weeks.
We’ve now hit the peak of the latest cycle, with MotorMouth figures showing prices have levelled out in Sydney, Melbourne and Brisbane over the past week, having risen 20 cpl within a month.
That means now is a particularly expensive time to buy fuel, with the ACCC advising motorists to wait to fill up their tanks until prices fall again in coming weeks.
If usual trends hold, then prices should bottom out just before Christmas and begin rising again.
Oil price outlook uncertain
The outlook for petrol prices over Christmas is much more uncertain this year, largely because of the big disruptions in global oil markets over 2022.
Oil prices have fallen significantly from highs earlier this year but were rising again late last week on China easing COVID-19 rules and hopes that the global economic slowdown won’t be as bad as feared.
The Singapore gasoline price – a benchmark that feeds into Australian bowsers – rose last week to $US103.90 a barrel for a 10-week high.
But prices could easily fall again, with producers’ cartel OPEC+ about to decide whether to change oil production before Christmas.
CommSec chief economist Craig James said OPEC+ may tighten oil production to ensure elevated prices of $US80 to $US90 a barrel.
