Good news ahead for motoristsWeekly petrol prices
Wholesale petrol: Today, the national average wholesale (terminal gate) unleaded petrol price stands at 131.8 cents a litre, down by 2.5 cents over the week and at 3-month lows (lowest since May 1).
Retail petrol: According to the Australian Institute of Petroleum, the national average Australian price of unleaded petrol rose from 2-month lows last week, up by 5.1 cents to 149.6 cents a litre. Petrol discounting cycles ended In Sydney, Melbourne and Brisbane during the week. The national average diesel price fell for the sixth straight week.
What does it all mean?
The national petrol pump price rose last week reflecting the ending of discounting cycles in Sydney, Melbourne and Brisbane. But for all the capital cities with discounting cycles, petrol prices are now falling and this will be reflected in next week’s national average price.
The more positive news is the outlook. The wholesale petrol price continues to drop – now near the lowest levels in three months. Motorists can expect lower prices at the petrol pump over the next fortnight. From the highs, the drop in the wholesale price is currently around 8 cents a litre – potentially providing savings of around $5 to fill up a petrol tank with fuel.
The lower price of global crude, and in turn, Australian wholesale prices for petrol and diesel, reflect decisions by OPEC and non-OPEC producers to lift production. Producers seem to be more comfortable with global crude near US$70 a barrel rather than US$80 a barrel.
Petrol prices will be in the news on Wednesday when the June quarter inflation figures are released. We estimate that petrol prices rose by 6.5-7.0 per cent in the quarter, adding around 0.2 percentage points to the quarterly growth in the consumer price index. Headline inflation may have lifted to a 2.3 per cent annual rate in the quarter, up from 1.9 per cent in March. The underlying rate of inflation (excludes volatile measures like petrol) may have remained at a 1.9 per cent annual rate.
The Reserve Bank won’t totally dismiss the higher headline rate of inflation as the lift in petrol prices may serve to lift transport costs and influence wage negotiations. But petrol prices have probably peaked for this cycle, so no on-going petrol price boost would be assumed by the Reserve Bank.
What do the figures show?Petrol prices
According to the Australian Institute of Petroleum, the national average Australian price of unleaded petrol rose by 5.1 cents to 149.6 cents a litre in the past week.
The metropolitan petrol price rose by 6.8 cents to 149.2 cents per litre and the regional price rose by 1.5 cents to 150.4 cents per litre. The gross retail margin rose by 0.9 cents to 14.98 cents.
Average unleaded petrol prices across states and territories over the past week were: Sydney (up by 6.6 cents to 148.5 c/l), Melbourne (up by 13.5 cents to 153.0 c/l), Brisbane (up by 15.4 cents to 151.9 c/l), Adelaide (down by 17.9 cents to 133.0 c/l), Perth (down by 0.5 cents to 146.8 c/l), Darwin (down by 0.2 cents to 156.6 c/l), Canberra (flat at 155.0c/l) and Hobart (flat at 158.6 c/l).
Today, the national average wholesale (terminal gate) unleaded petrol price stands at 131.8 cents a litre, down by 2.5 cents over the week. The terminal gate diesel price stands at 135.2 cents a litre, down by 3.2 cents over the past week.
The national average diesel petrol price fell by 0.5 cents to 153.0 cents a litre over the week. The metropolitan price fell by 0.6 cents to 153.2 cents a litre with the regional price down 0.4 cents to 152.9 cents a litre. 
Last week the key Singapore gasoline price rose by US85 cents or 1.1 per cent to US$81.85 a barrel. In Australian dollar terms, the Singapore gasoline price rose by $1.76 or 1.6 per cent last week to $110.98 a barrel or 69.80 cents a litre.
MotorMouth records the following average retail prices for capital cities today: Sydney 142.3c; Melbourne 152.6c; Brisbane 157.8c; Adelaide 130.0c; Perth 135.8c; Canberra 155.0c; Darwin 156.6c; Hobart 158.5c.
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?
Prices at the petrol pump have scope to ease in line with declines in wholesale prices. If motorists start to see prices nearer to $1.30 a litre than $1.50 a litre, confidence and spending levels will potentially lift. Petrol prices in Adelaide, Sydney and Perth are in the $1.30s today. Filling up the car with petrol is the most significant regular weekly purchase by Australian households.
CommSec expects interest rates to remain unchanged until at least early 2019.
Published by Craig James, Chief Economist, CommSec