Weekly Petrol Prices; Credit & debit cards
- Petrol: According to data from the Australian Institute of Petroleum, the national average price of unleaded petrol fell by 0.9 cents last week to a 17-month low of 121.2 cents a litre. The annual fall in petrol prices to January 13 stands at 11.9 per cent – the biggest decline in over two years (since October 2016).
- Average credit card debt: The average credit card balance recorded a seasonal increase of $39.26 (or 1.2 per cent) to $3,260.13 in November. It was the smallest November increase in three years.
- Credit cards: According to APRA data, bank lending to households via credit cards fell by 3.1 per cent in the year to November – the biggest decline in 13 years of data.
The petrol figures have implications for retailers, especially petrol marketing groups. The manufacturing data provides guidance for companies in the Industrials sector. Credit card data is important for the retail and financial sectors.
What does it all mean?
- The good news is that the national petrol price is at 17-month lows. But the likelihood is that prices will lift modestly from here over the coming fortnight. The Singapore gasoline price has lifted around 6 cents a litre from recent lows with the domestic terminal gate (or wholesale) price up by around 5 cents a litre.
- So far retail prices remain low – in fact average Sydney and Adelaide pump prices are below cost, that is below the wholesale price. But Melbourne and Brisbane prices are creeping higher. And Sydney and Adelaide prices are likely to follow. Still, nationally, the wholesale price is just below 117 cents a litre – the lowest level for an equivalent January period in three years. And the gross retail margin has slumped to near 4-year lows of 6.6 cents a litre, below the ‘normal’ margin of around 13 cents.
- Aussie consumers are actively using their credit cards. But they are just as actively paying down the outstanding debt. In 2018, consumers made around 15 credit card purchases per month, up from around 13 purchases in 2017. But bank lending on credit cards fell by just over 3 per cent in November on a year ago – the biggest annual decline in 13 years of records.
- The smart use of credit cards by Aussie consumers is encouraging news for policymakers and retailers alike. Consumers are spending, but responsibly.
- The average Aussie consumer is making a card transaction (debit or credit) around once a day – probably hardly surprising given the decline in cash use. Card use has doubled over the past nine years.
What do the figures show?
Petrol prices
- According to the Australian Institute of Petroleum, the national average price of unleaded petrol fell by 0.9 cents last week to a 17-month low of 121.2 cents a litre.
- The metropolitan petrol price fell by 0.4 cents to 117.1 cents per litre, and the regional price fell by 1.9 cents to 129.3 cents per litre.
- The gross retail unleaded petrol margin fell from 10 cents to 6.6 cents (near 4-year low). The smoothed two-month rolling average margin eased from 16 cents/litre to 14.8 cents/litre.
- Average unleaded petrol prices across states and territories over the past week were: Sydney (down by 1.2 cents to 113.6 c/l), Melbourne (up by 0.2 cents to 115.2 c/l), Brisbane (up by 0.3 cents to 115.3 c/l), Adelaide (up by 0.7 cents to 110.9 c/l), Perth (down by 1.2 cents to 125.6 c/l), Darwin (down by 3.9 cents to 129.6 c/l), Canberra (down by 1.9 cents to 144.8 c/l) and Hobart (down by 2.3 cents to 149.0 c/l).
- Today, the national average wholesale (terminal gate) unleaded petrol price stands at 116.7 cents a litre, up by 3.7 cents over the week. The terminal gate diesel price stands at 126.3 cents a litre, up by 4.6 cents over the past week.
- The national average diesel petrol price fell by 2.8 cents to 140.9 cents a litre over the week. The metropolitan price fell by 3.8 cents to 138.3 cents a litre with the regional price down by 2.0 cents to 143.0 cents a litre.
- Last week, the key Singapore gasoline price rose by US$3.30 or 5.5 per cent to US$63.90 a barrel after rising US$5.10 or 9.2 per cent the previous week. In Australian dollar terms, the Singapore gasoline price rose by $2.23 or 2.6 per cent last week to $88.60 a barrel or 55.66 cents a litre.
- MotorMouth records the following average retail prices for capital cities today: Sydney 113.3c; Melbourne 117.6c; Brisbane 117.8c; Adelaide 112.0c; Perth 114.2c; Canberra 144.2c; Darwin 128.6c; Hobart 147.1c.
Credit & debit card lending:
- APRA data shows that bank lending to households on credit cards was $40.5 billion in November, down 3.1 per cent on a year ago and the biggest annual decline in 13 years of records.
The following is Reserve Bank credit and debit card data. The data was revised in May 2018, so latest estimates are not strictly comparable with figures before that date.
- According to the Reserve Bank, the average credit card balance recorded a seasonal increase of $39.26 (or 1.2 per cent) to $3,260.13 in November. It was the smallest November increase in three years.
- Of credit cards attracting interest charges, the average outstanding balance fell by $10.43 in November to $1,973.52.
- The average credit card limit rose by $12.30 to $9,512.05 in November.
- Usage of credit card limits stood at 34.3 per cent in November (historic low was 33.6 per cent in October 2017).
- The number of credit card accounts stood at 15.973 million in November, down 0.4 per cent from 16.043 million in May 2018 when the revised estimates began to apply.
- The number of debit card accounts stood at 37.502 million in November, up 2.9 per cent from 36.428 million in May 2018 when the revised estimates began to apply.
- The number of ATM transactions in November was down by 3.9 per cent over the year – the biggest annual fall in seven months. Transactions have been consistently falling in annual terms for over six years.
- The number of debit card purchases in November was 14.7 per cent higher than a year ago.
- In November, 14.6 purchases per account were made on credit cards (rolling annual average) with 13.2 transactions per account also made on debit cards.
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.
- The Reserve Bank releases data on credit and debit card transactions each month. The credit card figures are useful in highlighting consumer borrowing and spending trends.
What are the implications for interest rates and investors?
- Petrol prices are set to rise but they still remain low on an historic basis. Average Australian prices are headed for $1.25-1.30 a litre – levels that shouldn’t play havoc with consumer spending plans.
- Over the December quarter, petrol prices fell about 3 per cent, thus keeping the headline rate of inflation close to 2 per cent.
- The latest credit and debit card data show no signs that Aussie consumers are retreating to their burrows. Credit and debit card purchases in November were up 5.8 per cent over May. The previous year, growth was closer to 3.6 per cent.
- CommSec expects official interest rate settings to remain on hold for the foreseeable future.