Australian consumers continue to get stung by the push for margin expansion in petrol prices.
That’s the only conclusion to be drawn after Australian Institute of Petroleum figures showing that the national average Australian price of petrol rose by 0.8 cents per litre to 138.5 cents per litre in the week to August 9.
The metropolitan petrol price rose by 1.2 cents to 137.7 cents per litre and the regional price was unchanged at 140.1 cents per litre.
CommSec economist Savanth Sebastian, in a note released this afternoon, said “motorists certainly have the right to question why … domestic pump prices have lifted in the past fortnight”.
That’s at the same time oil prices are continuing to fall — Nymex crude made a fresh 6 year low in futures trade this morning — and the Aussie dollar continues to hold up well.
“Even in Aussie dollar terms the Singapore unleaded price has now fallen for seven of the past eight weeks having lost a cumulative total of over AUD$13, and is now holding at a 17-week low,” Sebastian wrote.
Yet prices are rising. What gives?
Like Westpac last week Sebastian highlights that the reason behind the breakdown in correlation between what consumers might expect to see at the petrol pump is the expansion in margins.
Indeed, he highlights that the situation has caught the eye of the RBA in last week’s Statement on Monetary Policy.
“The recent increase is only partly explained by higher international prices for
crude oil and the depreciation of the Australian dollar over that period (Graph 5.3). Refining margins have also increased and there has been an increase in retail margins, which had been compressed with the earlier decline in petrol prices,” The RBA said.
But the good news is Sebastian reckons that the fact Aussie dollar Tapis is at a 17 week low will put “domestic pump prices under downward pressure.” But he added if not the “situation will bear further scrutiny in coming weeks”.
Mr Sims and the ACCC are hopefully watching as well.