Biggest weekly fall in petrol prices in a decadePetrol prices; Credit & debit cards
Unleaded petrol price: According to the Australian Institute of Petroleum the national average price of unleaded petrol fell by 6.7 cents a litre last week to 149.4 cents a litre – the biggest weekly fall since the week ended November 30 2008 (down 7.0 cents a litre).
Credit card debt: The average credit card balance rose by $3.23 to $3,221.05 in September, up from $3,217.82 in August. 
What does it all mean?
It was only two weeks ago the petrol prices were at decade-high levels. But unleaded prices have fallen by 11.1 cents a litre over the past fortnight. And last week the national average petrol price fell by 6.7 cents a litre – the biggest weekly fall since November 30 2008 (down by 7.0 cents a litre). Pump prices in Adelaide (down 19.2 cents a litre), Brisbane (down 9.6 cents a litre), Sydney (down 9 cents a litre) and Melbourne (down 8.8 cents a litre) all plunged. But prices still remain around the “new normal” price of $1.50 a litre on average across Australia.
The regional Singapore benchmark gasoline price has fallen by 21 cents a litre from recent highs and Australia’s wholesale petrol price has fallen by 15 cents, implying a further fall of around 5-7 cents a litre over the next fortnight, subject to the vagaries of the retail petrol price discounting cycle. The average motorist may now end up paying around $18 less to fill a 70 litre tank compared with the beginning of October.
The catalyst for falling petrol prices has been the near 20 per cent decline in Brent crude and US Nymex oil prices after reaching 4-year highs in early October. In fact, the Nymex price has fallen for ten successive days – the longest stretch of declines since July 1984.
Last week the price of Brent crude oil fell by 3.6 per cent to US$70.18 a barrel and the Nymex price declined by 4.7 per cent to US$60.19 a barrel. With the US, Russia and Saudi Arabia pumping near record-high crude at 33 million barrels per day, supply has outpaced demand. And Iranian supply constraints will be less-than-expected with the US granting waivers to several countries.
What do the figures show?Petrol prices
According to the Australian Institute of Petroleum the national average price of unleaded petrol fell by 6.7 cents a litre last week to 149.4 cents a litre – the biggest weekly fall since the week ended November 30 2008 (down 7.0 cents a litre).
The metropolitan petrol price fell by 8.8 cents to 145.9 cents per litre, and the regional price fell by 2.7 cents to 156.3 cents per litre. The gross retail margin fell by 3.2 cents to 16.20 cents a litre.
Average unleaded petrol prices across states and territories over the past week were: Sydney (down by 9.8 cents to 145.1 c/l), Melbourne (down by 5.5 cents to 158.7 c/l), Brisbane (down by 8.8 cents to 149.9 c/l), Adelaide (down by 19.2 cents to 141.8 c/l), Perth (down by 2.7 cents to 152.2 c/l), Darwin (down by 4.8 cents to 157.0 c/l),Canberra (down by 0.8 cents to 164.4 c/l) and Hobart (down by 0.7 cents to 163.7 c/l).
Today, the national average wholesale (terminal gate) unleaded petrol price stands at 132.0 cents a litre, down by 4.2 cents over the week. The terminal gate diesel price stands at 142.4 cents a litre, down by 6.1 cents over the past week. The wholesale unleaded price has fallen 15 cents a litre from recent highs.
The national average diesel petrol price fell by 0.7 cents to 163.9 cents a litre over the week. The metropolitan price fell by 0.9 cents to 163.9 cents a litre with the regional price down by 0.7 cents to 163.8 cents a litre.
Last week the key Singapore gasoline price fell by US$4.71 or 6.2 per cent to US$71.49 a barrel – the lowest level in over 12 months. In Australian dollar terms, the Singapore gasoline price fell by $6.52 or 6.2 per cent last week to $98.69 a barrel or 62.07 cents a litre – the lowest level in 8½ months. Over the past five weeks, Singapore gasoline has fallen 21.2 cents a litre in Australian dollar terms.
MotorMouth records the following average retail prices for capital cities today: Sydney 135.3c; Melbourne 144.8c; Brisbane 137.4c; Adelaide 132.0c; Perth 141.3c; Canberra 164.2c; Darwin 155.7c; Hobart 163.6c.
Credit & debit card lending:
The average credit card balance rose by $3.23 to $3,221.05 in September, up from $3,217.82 in August.
Of credit cards attracting interest charges, the average outstanding balance fell by $13.99 in September to $1,994.63.
The average credit card limit fell by $3.38 to $9,492.72 in September.
Usage of credit card limits stood at 33.9 per cent in September.
The number of credit card accounts stood at 16.001 million in September.
The number of debit card accounts stood at 37.242 million in September.
The number of ATM transactions in September was down by 3.1 per cent over the year. Transactions have been consistently falling in annual terms for over six years.
The number of debit card purchases in September were 14.5 per cent higher than a year ago with the value up by 8.8 per cent.
In September 13.9 transactions per account were made on credit cards (on average) with 14.4 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?
The weakening in fuel prices is timely. It also coincides with a sharp fall in electricity prices in Sydney, Brisbane and Adelaide, in particular, over the year to September. Combined with declining childcare prices, Aussie consumers may have a bit more spare change to put to work at shopping centres for the upcoming Christmas trading season. That said, concerns about falling home prices may act as a deterrent.
It was only a few weeks ago that some oil market analysts were forecasting a return to US$100 a barrel crude oil prices, but investor sentiment has turned sharply. The volatility in prices serves to highlight that motorists remain captive to OPEC producers. With prices plunging, OPEC has announced over the weekend that they may cut oil supply in 2019. In fact, Saudi Arabia has already said that it will export 500,000 fewer barrels a day in December than November with Iranian waivers coming into effect. But Russia appears unconvinced with Energy Minister Alexander Novak reported as saying “it’s hard to say” whether oil markets will be oversupplied next year.
While OPEC’s meeting in Vienna next month will be closely observed by oil analysts, the vagaries of the retail unleaded petrol price discounting continues. Pump prices may lift from cyclical lows next week as the discounting cycle comes to an end in Sydney, Brisbane and Adelaide.
Average credit card balances remain low presently. Aussie households continue to prefer debit card usage for everyday transactions. And ‘big ticket’ items are often purchased using lines of credit and mortgage offset accounts, rather than credit cards. But credit card companies and banks are aware of this, so look out for a continuing push by the industry to focus on millennials. Young people with good credit history and high incomes are being targeted in the US by well-known ‘go-to’ brands, such as Uber Visa, Ikea Visa, Amazon Visa and the Apple-Goldman Sachs card.
At present, CommSec expects interest rates to remain unchanged until late 2019. But we will be watching wage and price trends closely over coming months.
Published by Ryan Felsman, Senior Economist, CommSec