Melbourne petrol prices lift into AFL finals
Weekly petrol prices

Petrol: According to the Australian Institute of Petroleum, the national average price of unleaded petrol fell by 1.5 cents in the past week to 141.3 cents a litre. Pump prices fell in Sydney (after last week’s record weekly increase) and Brisbane as discounting cycles commenced.

Melbourne pump prices: Over the past week, Melbourne unleaded petrol prices lifted by 14 cents to an average of $1.44 a litre today – well above the wholesale price of $1.29 a litre – as retailers increased prices.

Movements in the petrol price can affect consumer spending, and in turn, prospects for retailers.

What does it all mean?

• The AFL finals series kicks-off later this week. Collingwood and Geelong supporters are well advised to leave the car at home and catch public transport to the “G” on Friday night. Melbourne unleaded petrol prices have lifted by almost 14 cents in the past week to around $1.44 a litre today as the retail discounting cycle ended.

• According to MotorMouth and the RACV, retail pump prices are ranging between 118 and 166 cents a litre across the Melbourne metropolitan area today. But with the terminal gate or wholesale unleaded petrol currently averaging near 129 cents a litre, motorists are encouraged to shop around as they may find some servos that have not yet increased prices. Pump prices are likely to increase into the weekend, so drivers should top-up, not fill-up before they head to footy finals.

• There’s better news for West Coast, Greater Western Sydney and Brisbane supporters heading to home games at Burswood, Homebush and Woolloongabba. Over the past week pump prices in Sydney and Brisbane have fallen by around 15-18 cents a litre and are now averaging $1.34-$1.37 a litre today following the commencement of the discounting cycle. Bowser prices in Perth typically bottom on Monday, so Eagles fans should fill-up today.

• Australia imports around 20 per cent of its petrol requirements from Singaporean and South Korean refiners, so developments in global crude oil prices influence domestic unleaded pump prices. And the re-escalation of the US-China trade war on the weekend could be a positive for Aussie drivers. Crude oil prices have fallen for four successive days – near the longest run of declines in five weeks – with the US Nymex crude futures price down a further 0.5 per cent to US$53.47 a barrel in trading today after falling by 2.1 per cent on Friday. The futures contract has fallen by around 5.2 per cent since last Tuesday. And the Brent crude oil price is down 1.1 per cent to US$58.69 a barrel in trading so far today, following a similar fall on Friday.

• Crude oil prices have come under renewed pressure after China announced 5 per cent tariffs – for the first time – on US crude oil imports effective on September 1 on Friday.

• China’s demand for US crude oil has eased sharply as the trade war has intensified. In fact, Chinese refiners have dropped from third to ninth (purchases of US$16.8 million barrels) in the ranking of US crude buyers over the first five months of 2019, according to the US Energy Information Administration.

What do the figures show?

Petrol prices

• According to the Australian Institute of Petroleum, the national average price of unleaded petrol fell by 1.5 cents in the past week to 141.3 cents a litre. The metropolitan price fell by 2.6 cents to 141.0 cents a litre, but the regional price rose by 0.5 cents to 141.8 cents a litre.

• Average unleaded petrol prices across states and territories over the past week were: Sydney (down by 7.9 cents to 143.4 c/l), Melbourne (up by 4.1 cents to 135.1 c/l), Brisbane (down by 13.5 cents to 141.7 c/l), Adelaide (up by 11.0 cents to 152.0 c/l), Perth (up by 0.1 cent to 139.2 c/l), Darwin (down by 0.4 cents to 138.9 c/l), Canberra (down by 0.1 cent to 141.8 c/l) and Hobart (down by 0.1 cent to 151.4 c/l).

• The smoothed gross retail margin for unleaded petrol fell from 11.75 cents a litre to 11.51 cents a litre last week (24-month average: 12 cents a litre).

• The national average diesel petrol price fell by 0.2 cents a litre to 147.2 cents a litre over the week. The metropolitan price fell by 0.4 cents to 145.7 cents a litre and the regional price fell by 0.1 cent a litre to 148.4 cents a litre.

• MotorMouth records the following average retail prices for capital cities today: Sydney 136.6c; Melbourne 143.6c; Brisbane 134.0c; Adelaide 141.1c; Perth 129.7c; Canberra 141.8c; Darwin 138.8c; Hobart 151.3c.

• Today, the national average wholesale (terminal gate) unleaded petrol price stands at a 129.4 cents a litre – little changed over the week. The terminal gate diesel price stands at 134.7 cents a litre, up by 0.5 cents over the past week.

• Last week, the key Singapore gasoline price fell by US35 cents or 0.5 per cent to US$69.15 a barrel. In Australian dollar terms, the Singapore gasoline price was unchanged at $102.35 a barrel or 64.37 cents a litre.

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 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 prices have lifted by around 20 per cent so far this year, supported by supply restraint by OPEC and Russia. But weakening global demand following China’s decision to include US crude oil on its tariff list is likely to exert downward pressure on prices in the near-term.

• CommBank Group commodity strategists are forecasting a US Nymex oil price of US$55 a barrel and a Brent crude oil price of US$59 a barrel by year end, slightly below previous forecasts.

Ryan Felsman, Senior Economist, CommSec