Why petrol is costing more at the pump
Petrol price cycles in Australia are highly volatile at the best of times, but Vivek Dhar, mining and energy economist at Commonwealth Bank, said there were two main reasons why petrol prices across the country have surged in the past week.
“One has been a tightening of oil markets, and that’s driven by one resilient demand, as well as OPEC+ supply cuts, which is a group of countries that control about 40 per cent of global supply,” he said.
"That has, for us, been instrumental in driving oil prices higher and tightening oil markets.
“The second factor has been a fall in the Australian dollar … and as the Australian dollar falls, it makes it more expensive to buy petrol.”
Also this seems important:
Those wholesale price movements make up around 85 per cent of what motorists pay at the pump … while the remaining 15 per cent is from retail price movement.
This is the best summary I could come up with:
Since the federal government’s halving of the fuel excise ended last September, the national average weekly petrol price had been hovering around of 175 to 180 cents a litre.
The AIP’s latest weekly report also showed the average national price for diesel hit a near eight-month high of 206.9 cents a litre.
The chief executive of the Australasian Convenience and Petroleum Marketers Association, Mark McKenzie, said those international factors were responsible for driving up the wholesale price.
Although oil price movements have not risen as aggressively as analysts first expected, any relief at the petrol pump is unlikely for the next few weeks, Mr Dhar said.
Mr Dhar said the weakening of the Australian dollar coupled with the current status of the oil markets would keep petrol prices higher on average.
Mr McKenzie agreed that petrol prices will remain elevated, based on current market conditions, and said it was hard to predict when relief might flow through.
I’m a bot and I’m open source!