Brisbane petrol prices near 3½ year highs… but relief in sight for Aussie motoristsWeekly petrol prices
Petrol: Due to the public holiday in Canberra, the Australian Institute of Petroleum has not released the national average Australian price of unleaded petrol in the past week. Today, the national average wholesale (terminal gate) unleaded petrol price stands at a 3½-year high of 138.7 cents a litre, up by 3.5 cents over the week. The terminal gate diesel price stands at 140.7 cents a litre, up by 2.0 cents over the past week.
Brisbane fuel prices are elevated: According to independent online petrol pricing researcher, MotorMouth, retail pump prices in Brisbane are near the highest in 3½-years at 157.9 cents a litre today.
Regional price: The Singapore gasoline benchmark price is near 3½-year highs, but declined last week pointing to potentially lower pump prices in Australia in the near term. The petrol figures have implications for retailers, especially petrol marketing groups.
What does it all mean?
Queensland announced its rugby league team for the State of Origin series opener on June 6 this morning. The Maroons have dominated the series for the past decade. And another area where Queensland routinely “beats” New South Wales is fuel prices.
Brisbane pump prices are near the highest in 3½ years, higher than other major capital cities, including Sydney. Unleaded petrol prices averaged 159.4 cents per litre at their peak on May 23 according to MotorMouth. Some motorists paid more than 160 cents per litre for unleaded petrol in suburban areas.
Global oil prices recently reached 4-year highs. Brisbane’s petrol price cycle is also a contributor to elevated pump prices. Independent price monitoring company Fueltrac and the Australian Competition and Consumer Commission have both highlighted Queensland’s uncompetitive petrol landscape. According to Fueltrac, a lack of independent retailers operating in the Brisbane market means that bowser heavyweights Shell Coles Express and Woolworths have significant pricing power.
There is some good news for Brisbane motorists, however. It appears that pump prices have peaked as the month-long price cycle has run its course. Prices in Sydney and Melbourne are also falling again as the peak cycle ends in those cities.
And global oil prices fell last week. The Singapore price of unleaded petrol is the key petrol benchmark for Australia. Last week the Singapore gasoline price fell from 3½-year highs of US$91.70 a barrel to US$89.90 a barrel.
Global oil prices fell by 3-4 per cent last Friday on news that Saudi Arabia and Russia were discussing a potential easing of oil production cuts. OPEC and non-OPEC oil nations meet in Vienna on June 22 to discuss the next production agreement.
Last week the Brent crude oil price fell by 2.6 per cent to US$76.44 a barrel. And the US Nymex fell by 4.8 per cent to US$67.88 a barrel after six weeks of gains.
US crude output is increasing as oil drillers continue their search for new oil fields to exploit. Over the week the number of oil rigs in operation in the US rose by 15 to 859 – the highest level since 2015.
What do the figures show?Petrol prices
Today, the national average wholesale (terminal gate) unleaded petrol price stands at a 3½-year high of 138.7 cents a litre, up by 3.5 cents over the week. The terminal gate diesel price stands at 140.7 cents a litre, up by 2.0 cents over the past week.
Last week the key Singapore gasoline price fell by US$1.80 or 2 per cent to US$89.90 a barrel. In Australian dollar terms the Singapore gasoline price fell by $3.12 or 2.6 per cent to $118.84 a barrel or 74.74 cents a litre.
MotorMouth records the following average retail prices for capital cities today: Sydney 154.4c; Melbourne 155.9c; Brisbane 157.9c; Adelaide 145.1c; Perth 139.8c; Canberra 149.5c; Darwin 151.3c; Hobart 155.4c.
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.
What are the implications for interest rates and investors?
Crude oil is a globally traded commodity. The Brent crude oil price recently breached US$80 per barrel due to supply restraint from OPEC and Russia. Drivers around the world are feeling the pain with pump prices at 3-year highs.
The US has limited influence on OPEC, but pressure is growing on US Energy Secretary Rick Perry to ‘stand up’ to OPEC and attend its meeting in Vienna next month. American motorists may weigh in at the ballot box when the mid-term elections are held in November.
Here in Australia petrol prices are currently over $1.50 per litre in most regions. Prices aren’t far off 4-year highs, but prices appear to have peaked at the conclusion of the month-long price cycle in Brisbane, Sydney and Melbourne. Global oil prices have fallen, and should the trend continue, motorists will see the benefit at the petrol pump.
In Brisbane, beleaguered drivers may eventually be able to source real-time prices online after the Queensland Government announced that it would commence a two year trial, mirroring the compulsory ‘live’ pricing of service stations already available in New South Wales.
Elevated oil and petrol prices will lift headline inflation. However, pricing pressures from wages and goods remain benign. Therefore, CommSec expects interest rates to be unchanged for the foreseeable future.
Published by Ryan Felsman, Senior Economist, CommSec