Australian Motorists to Endure High Fuel Prices With No Short Term Relief

Residents queue for fuel at a petrol station in Rockhampton, Australia, on Feb. 21, 2015. (Peter Parks/AFP via Getty Images)

Australian motorists will continue to be hit with hefty fuel prices in the coming weeks as wholesale prices keep rising.

Global oil prices have stabilised after reaching a peak in June 2022 due to the impact of the war in Ukraine.

However, a rebound of up to 23 percent since a low in mid-June 2023 has caused wholesale prices to remain high in Australia.

Chris Ford, the media and communications general manager at the price comparison website Compare the Market, said Australian wholesale fuel prices rose over 13 cents a litre in the same period.

As a result, retail prices remained high for a longer period than the usual fuel cycle movements.

“We’ve just finished the discount phase of the price cycle in Sydney with prices climbing again in the last few days, and they should start to move north in Melbourne and Brisbane this coming week as well,” he said in comments obtained by AAP.

According to the Australian Institute of Petroleum, the average national petrol retail price was around $1.88 (US$1.23) a litre in the week ending Aug. 6, up from $1.74 a litre a month ago.

Hobart had the highest average petrol prices among the capital cities at $1.95 a litre, followed by Brisbane at $1.92 a litre and Darwin at $1.91 a litre.

Meanwhile, Melbourne and Sydney drivers paid around $1.85 for a litre of petrol.

Although petrol prices fell short of the $2 a litre mark recorded last year, it added to the high living cost pressure endured by many Australians.

Data from the financial comparison website Finder showed that a significant number of Australians are struggling with petrol costs.

The company found that one in five Australian motorists considered petrol one of their top three most stressful expenses in August.

High Fuel Prices Caused by Reduced Oil Production

Commonwealth Bank energy expert Vivek Dhar said the decision of major oil-producing nations to reduce supplies had started to impact prices.

In June, Opec+, a group of petroleum exporting countries and allies led by Russia that produces around 40 percent of the world’s crude oil, announced that it would limit its production output into 2024.

The output cuts had led to a drop of 3.66 million oil barrels per day, or 3.6 percent of global demand.

The logo of the Organization of the Petroleum Exporting Countries (OPEC) is seen at the headquarters building in Vienna, Austria on April 4, 2013. (Alexander Klein/AFP via Getty Images)

As demand remained resilient, Mr. Dhar noted that global stockpiles would dwindle, pushing up oil prices.

“The trajectory of global oil stockpiles in coming months will determine the extent of the shortfall,” he said in comments obtained by AAP.

While Mr. Dhar said the group’s output cuts would be the primary determinant of oil prices in 2023, he believes the decreased economic activities in many advanced countries in 2024 would cause prices to fall again.

“Given that refined products like petrol and diesel are non-discretionary for many end users, we think a slackening in the labour market will be key for oil demand to ease next year,” he said.

Tips for Drivers to Save Money

While the rise of global oil prices is something out of motorists’ control, automobile experts have said there are some ways for drivers to save fuel costs.

Gary Hunter, a car insurance expert at Finder, said petrol prices could be lower on some particular days during the week.

“The price of fuel can vary day to day, but generally, prices are cheaper on a Tuesday/Wednesday,” he told The Epoch Times.

“Weekend demand tends to push the price up. You can track fuel prices in real-time using FuelCheck or the 7Eleven petrol app.”

Mr. Hunter also said drivers could reduce their vehicles’ fuel consumption by doing proper maintenance and changing some driving habits.

“Keep your tyres inflated correctly and check the wheel alignment. Both of these steps can help maximise fuel efficiency and keep costs down,” he said.

“Drive smoothly and try to maintain a steady speed, accelerate gently and avoid traffic congestion when possible to use less fuel.

“Keeping their air-con off in the cooler months can also preserve fuel.”