Australians Continue to Endure Record High Petrol Prices as Russia-Ukraine War Drags on

A man fills his car up with petrol in Melbourne, Australia, on May 13, 2014. Scott Barbour/Getty Images

Petrol prices in Australia surged to record highs in the week ending March 20 as the ongoing Russia-Ukraine war kept global oil prices at high levels.

According to the Australian Institute of Petroleum, the national weekly average for retail petrol prices rose sharply by 14.9 percent to $2.12 a litre (US$5.94 a gallon) during the period.

Among Australian states and territories, Tasmania had the highest weekly average petrol prices at $2.21 a litre (US$1.63), while Western Australia’s prices were the lowest at $2.05 (US$1.05) a litre.

Worse economists anticipate that petrol prices could go up even further as crude oil prices keep increasing and staying above the $US100 a barrel level.

Global oil prices (U.S. light crude) rose back to US$112 per barrel on March 21 after plunging to $US95 a barrel a few days earlier.

Analysis by Western Australia based motoring insurer Royal Automobile Club showed that Australian households would have to pay $670 more in fuel costs compared to 2021 if petrol prices remained at $2 a litre (US$1.48).

This figure would jump to $908 if petrol prices rose to $2.20 a litre (US$1.62) and $1,150 if prices reached $2.40 a litre (US$1.77).

A sign outside a petrol station shows the price of petrol breaking through the two Australian dollar (1.46 USD) a litre mark in Melbourne, Victoria, on March 3, 2022. William West/AFP via Getty Images

Facing the pressures from rising costs of living, the federal government said it would provide Australian families with “targeted” relief payments in the 2022 budget, which will be released on March 29.

Seven News has recently reported that Australian wage earners are expected to receive a one-off cash payment before the May election in an effort by the federal government to mitigate the adverse effects of increasing living costs in the country.

Politicians have not revealed details of the bonus; however, Seven News political editor Mark Riley said he had talked to bureaucrats and believed the payment might be between $200 and $400.

“I think it'll be a payment to ease the pressure on families of petrol prices and food prices… A couple of hundred, three hundred, four hundred tops,” Riley told Sunrise.

In addition, observers have speculated that Treasurer Josh Frydenberg may temporarily push down the fuel excise tax, which currently stands at 44 cents per litre (32 cents).

However, Chris Richardson, an economist from Deloitte Access Economics, warned that such a measure could extend fuel inflation and cause interest rates to rise earlier than expected.

He also emphasised that it would be challenging for the government to cancel the measure once it is implemented.

“These bandaids go on fast but come off slow,” he said.