Economists and industry analysts are predicting record high fuel prices for Australia in the coming weeks, linked in part to the downward spiral of the Australian dollar in the past quarter.
Our dollar has lost almost 15cents against the US dollar since May, recording a 33-month low at the beginning of this month.
At the same time, oil has reached a 15-month high of US $104 a barrel this week off the back of political instability in Egypt. Together these factors - among others - may soon see prices of $1.70 per litre or more for unleaded petrol.
For Australian motorists who may have previously hitched their buying patterns to the fuel price cycle, the advice from state motoring clubs is varied with fuel price cycles fluctuating wildly around the country.
In South Australia, the RAA told motorists to fill up at the beginning of the week, as prices there reach the bottom of the cycle, while in New South Wales, the NRMA is telling motorists to hold off until next week if possible.
According to price monitoring service Motor Mouth, the average prices for unleaded petrol around Australia at present vary from a low of 139.1 cents per litre in Adelaide to 152.8 cents per litre in Hobart.
But motorists have every reason to be sceptical: unleaded petrol is expected to hit $1.70 this month with the Australian dollar continuing to hover around 92 US cents and with oil at US$103 a barrel.
The previous record-high petrol price – again, around $1.70 per litre for unleaded - was recorded in 2008, when the Australian dollar was 96 US cents but oil was pushing US $150 a barrel.
Given oil is currently at around US$40 per barrel less than it was during the highs of 2008, why it is that Australian motorists may soon be facing unleaded prices of $1.70 per litre perhaps bears some closer examination.
Recent decisions to cease operations at both the Clyde (which closed last year) and Kurnell oil refineries have been blamed - among other reasons - for putting upward pressure on prices.
Could it also possibly have anything to do with the powerful supermarket duopoly that dominates fuel retailing in Australia apparently, and strangely, out of reach of the ACCC?
TMR will continue to watch the fuel price saga with interest, particularly if there are any words or actions from government (we aren’t expecting any…).
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