Petrol Prices Surge as Australian Dollar Stays Weak

A car drives past a flood-damaged service station in Lismore, Australia, on May 15, 2022. Photo by Dan Peled/Getty Images

Petrol prices have soared to nearly $2 a litre (US$4.88 a gallon) on average across Australia as the weak Australian dollar makes it more expensive for the country to import fuel.

According to the Australian Institute of Petroleum’s latest report, the national average retail petrol price jumped 11.1 cents to $1.96 a litre in the week ending Nov. 6.

While unleaded fuel prices rose by 14.8 cents to $1.99 a litre in capital cities over the week, diesel prices remained unchanged at $2.36 a litre.

A sign outside an Ampol petrol station in Melbourne, Australia on March 3, 2022. William West/AFP via Getty Images

The surges in petrol prices came as many Australian cities entered their first fuel cycle following the reinstatement of the full fuel excise tax, which adds more than 20 cents to every litre.

Melbourne had the highest average petrol prices, standing at $2.08 a litre, followed by Brisbane at $2.06 a litre, Sydney at $2.02 a litre and Hobart at $1.93 a litre.

Weak Australian Dollar Contributes to Price Surges

The Australian Broadcasting Corporation (ABC) reported that according to an analyst from online stockbroking firm CommSec, the weak Australian dollar caused fuel prices to climb by four cents in the past week and 13 cents since the start of the year.

Furthermore, Mark McKenzie, the CEO of the Australasian Convenience and Petroleum Marketers Association, said the weak exchange rate between the U.S and Australian dollars wiped out any discount from dropping oil prices.

“You actually see about 13 to 14 percent increases as a result of the devaluation of the Australian dollar in the last six months,” he said, as reported by ABC.

However, National Roads and Motorists’ Association spokesperson Peter Khoury said in comments obtained by AAP that many motorists were likely to see a fall in prices soon as some cities, such as Sydney, were at the top of their fuel cycles.

The petrol price cycle is a pattern of up-and-down movements in petrol prices, which results from pricing policies and not from changes in the wholesale cost of fuel.

According to a report by The Australia Institute, Australia imports around 91 percent of its fuel consumption, with the majority of the imports coming from Southeast Asia and South Korea.