More petrol price pain could be on the way for Australian motorists

Hector Vivas/LatinContent/Getty Images
  • Singapore gasoline prices soared by $US4.90, or 6%, to $US87.20 a barrel a last week, driven by renewed geopolitical concerns surrounding Iran, a major global oil producer.
  • The surge suggests Australian wholesale petrol prices will rise in the weeks ahead.
  • Commsec says unleaded pump prices of $1.40-$1.50 a litre “look to become the norm”.

The average price for unleaded petrol in Australia fell last week, dropping 1.1 cents per litre to 145.2 cents, according to the Australian Institute of Petroleum.

However, that looks set to be the exception to the rule in the near-term ahead, says Australian broker Commsec.

“In Australian dollar terms, the price of Singapore gasoline (where most of Australia’s petrol is sourced from) hit fresh 3-year highs last week. So the relief for motorists at Aussie petrol pumps last week will be short-lived,” says Craig James, Chief Economist at Commsec.

“Pump prices fell last week due to the down-draft of discounting cycles in Sydney, Melbourne and Brisbane.”

Last week, the key Singapore gasoline price soared by $US4.90, or 6%, to $US87.20 a barrel, driven by renewed geopolitical concerns surrounding Iran, a major global oil producer.

Commsec

Given the size of last week’s surge, it suggests that Australia’s average wholesale unleaded petrol price, currently sitting at a more than three-year-high of 133.5 cents a litre, will likely increase in the coming weeks.

“Pump prices of $1.40-$1.50 a litre look to become the norm,” says James.

“Since mid-March, Aussie families have had to find an extra $15 a month to fill their cars up with fuel. Discretionary spending is likely to come under further pressure.”

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