Sky-high petrol prices of up to $1.94 a litre a drag on everyone

“Filling up the car with petrol is one of the single biggest weekly purchases for consumers,” CommSec senior economist Ryan Felsman said. It’s also one of the biggest input costs for many businesses. Melbourne’s average price was $1.77 a litre on Monday, but prices were up to $1.90 in some […]

“Filling up the car with petrol is one of the single biggest weekly purchases for consumers,” CommSec senior economist Ryan Felsman said. It’s also one of the biggest input costs for many businesses.

Melbourne’s average price was $1.77 a litre on Monday, but prices were up to $1.90 in some suburbs. Mr Felsman said people should do their research. In Sydney, the highest prices are clustered in the Sydney’s affluent eastern suburbs and north shore, according to fuel tracking website, MotorMouth.

One Canberra ride-share driver who asked not to be named said it now cost him $80 to fill a tank, up from $50 just a few years ago. “It’s affecting me big time,” he said, adding Uber didn’t adjust its rates to factor higher prices.

“The driving costs have increased, and they don’t increase the wage.”

Transport Workers Union National Secretary Michael Kaine said ride-share drivers were being left to play catch up. “They’re forced to work longer hours just to make ends meet, and that has huge implications on safety,” he said.

The cartel of major oil producing nations known as the Organisation of the Petroleum Exporting Countries (OPEC) is constraining oil output over concerns fresh waves of COVID-19 could soften demand.

Oil prices plummeted in 2020, hitting $1.10 a litre as demand fell away. But the global economic rebound caused demand to soar and prices to follow. Oil supply is likely to remain constrained in coming months, with OPEC expected to release only an additional 400,000 barrels a day in January.

Silver lining

But Europe’s fourth COVID-19 wave could have a silver lining for Australian households, with a full lockdown in Austria and the prospect of mobility restrictions elsewhere causing the price of oil to slip across the globe.

Brent Crude last week fell about 4 per cent to $US78.89 ($1.08) a barrel, while US oil fell 6 per cent to US$75.94. US crude oil prices have declined by around $US9 a barrel since hitting seven-year highs in late October.

Crude prices were also pressured by ongoing speculation of a co-ordinated release of crude oil from strategic reserves in the US, China, India and Japan, aimed at dampening rising prices.

Mr Felsman said the “good news” for consumers was price falls passing through to domestic wholesale prices. The terminal gate price – the price at which tanker loads of fuel are sold to wholesalers from seaboard terminals – eased from the 13-year high of $1.57 a litre on November 1.

The average monthly cost for filling a 35-litre tank eased slightly from the record high recorded in early November to $232.68.

https://www.afr.com/policy/economy/sky-high-petrol-prices-of-up-to-1-94-a-litre-a-drag-on-everyone-20211122-p59b0r

Shaqil Heaton

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