Weekly petrol prices
- Petrol prices are limping, not leaping higher. According to the Australian Institute of Petroleum, the national average Australian price of unleaded petrol rose by just 0.2 cents per litre to 135.2 cents a litre in the week to February 6 – a fresh 26 month high. In fact prices fell in three capital cities last week.
- It now costs almost $95 to fill a 70 litre tank with petrol. Less change from a $100 bill means less spending at other retail outlets.
What does it all mean?
- Motorists can thank competition in the petrol market and a higher Australian dollar for the fact that petrol prices have been relatively stable over the past week. But this does appear to be the calm before the storm. Last week the Singapore gasoline price hit fresh 27-month highs, lifting by over a cent a litre. Last week we suggested that petrol prices were likely to breach $1.50 a litre over the next few months at the high point of the discounting cycle. The time is gradually drawing closer when we see those levels on petrol signboards.
- Competition and a stronger dollar can only do so much. With regional fuel prices at fresh highs, motorists will continue to see pump prices tick higher over the coming fortnight by a few cents a litre. It now costs almost $100 to fill a 70 litre petrol tank, an increase of around $7 in the space of two months. And as petrol prices creep higher, retailers have more reason to feel nervous.
What do the figures show?
Petrol prices:
- According to the Australian Institute of Petroleum, the national average Australian price of unleaded petrol rose by 0.2 cents per litre to 135.2 cents a litre in the week to February 6. The metropolitan price rose by 0.2 c/l to 135.4 c/l, while the regional average price rose by 0.2 c/l to 134.7 c/l.
- Petrol prices across states in the past week were: Sydney (down 0.6 cents to 135.5 c/l), Melbourne (up 0.1 cents to 134.5 c/l), Brisbane (up 1.9 cents to 137.9 c/l), Adelaide (down 0.9 cents to 133.3 c/l), Perth (up 0.1 cents to 134.2 c/l), Darwin (down 0.6 cents to 138.0 c/l), Canberra (up 7.4 cents to 138.6 c/l) and Hobart (up 0.3 cents to 140.5 c/l).
- The national average wholesale (terminal gate) price hit a 26-month high of 127.1 cents on January 26. However the wholesale price eased to 125.7 cents on February 2 before lifting again over the last three days to 126.7c/l.
- Last week, the key Singapore unleaded petrol price rose by US$5.20 (4.9 per cent) to US$110.50 a barrel. And in Australian dollar terms the Singapore gasoline price rose by $2.05 (1.9 per cent) over the week to $108.48 a barrel.
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. 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.
What are the implications for interest rates and investors?
- The rising cost of petrol represents more bad news for retailers. Filling the car with petrol is the single biggest purchase most people make every week. It may only be an extra dollar every few weeks, but it clearly adds up over time.
- The Reserve Bank will be watching petrol price trends very carefully. Not only does more costly petrol serve to lift inflation, it also acts to crimp consumer spending. At present the focus is more on the latter, not the former.
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