Christmas has come early for Australian petrol retailers, especially in Sydney.
According to new research from Commsec, the differential between wholesale and retail fuel prices in Australia’s largest city are now approaching the highest levels on record, coinciding with the start of school holidays for many Australian families.
“The gross retail margin — before other costs are taken out — stands at 20.7 cents a litre, one of the highest levels recorded,” says Craig James, Chief Economist at Commsec.
“In Sydney today the terminal gate, or wholesale price, is 124.2 cents a litre. Meanwhile MotorMouth records the average retail or pump price of fuel at 144.9 cents a litre.
James says margins have swelled in recent days, noting that discounting cycles ended in major capital cities last week “so current pump prices are generally well up on a week ago”.
“Last Tuesday the gross retail margin [in Sydney] was just 2 cents a litre. The bottom line is that motorists must closely follow the discounting cycle otherwise filling up the car with petrol could end up costing an extra $10-12.”
From a national perspective, the average wholesale unleaded petrol price stands at 124.1 cents a litre, says James, citing data from the Australian Institute of Petroleum.
In comparison, the average retail price for unleaded petrol currently stands at 131.4 cents in Melbourne, 148.2 cents in Brisbane, 146.2 cents in Adelaide, 127.2 cents in Perth, 149 cents in Canberra, 149.5 cents in Darwin and 143.2 cents in Hobart, according to data from Motormouth.
With the exception of Perth and to a lesser degree, Melbourne, margins are looking good for retailers but not so for consumers.
James says that in usual circumstances, it generally takes around three weeks for petrol prices in Australia’s eastern and southern capitals to fall from the high points to the lows of the discounting cycle.
“The good news — albeit modest — is that the wholesale price has fallen 0.7 cents a litre over the past few days,” James says.
Higher petrol prices, along with large increases in electricity and gas costs and continued weakness in wage growth, has been cited as one factor to explain the weakness in Australian household consumption in the September quarter of this year.
It grew by a paltry 0.1%, the weakest increase since the global financial crisis, led by spending in discretionary areas.
Firmer global growth and ongoing limits on crude oil production from OPEC and Russia, along with a weaker Australian dollar, has also contributed to the recent lift in petrol prices for Australian consumers.
This final chart from Commsec shows the Singapore gasoline price for unleaded petrol in Australian dollar terms.
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