Call us on 1300 794 893

Business News

Petrol prices slide and set to fall further

| More

Published on: Monday, July 28, 2014

by Savanth Sebastian, CommSec

 

  • Petrol prices slide: According to the Australian Institute of Petroleum, the national average Australian price of petrol fell by 4.7 cents per litre to 152.6 cents a litre in the week to July 27.
  • In Australian dollar terms the Singapore gasoline price fell by $5.12 a barrel or 4 per cent last week to $113.20 a barrel or 77.96 cents a litre – the lowest levels in almost six months.
  • The wholesale petrol price has continued to fall and now stands at a five -week low. Petrol prices in southern & eastern capital cities are currently at or near the low point in the cycle

The petrol figures have implications for retailers, especially petrol marketing groups.

What does it all mean?

There is good news in the latest petrol price trends. The Singapore gasoline price is falling, as is the wholesale price in Australia. The other good news is that petrol prices are trending lower again across eastern and southern states and if it follows past trends, prices are at or near the low point in the discounting cycle. It will be another 10-14 days or so before the low point of discounting cycle returns. But if global oil price trends continue it is likely to result in even cheaper prices in a fortnight’s time.

There is certainly a little bit more volatility in fuel prices given the political tensions in the Middle East as well as in Ukraine. However US oil inventories remain healthy, with production holding near the highest levels in four decades. While weaker European demand for oil has helped to keep a lid on global prices.

In addition the other good news for Aussie motorists is that the Aussie dollar has also been rising, ensuring that the global price fall are even more exacerbated when oil is brought into Australia. Importantly also US oil production continues to rise, hitting 44-year highs, and reducing worries about the potential for lower global oil supplies to boost prices.

In Australian dollar terms the Singapore gasoline price fell by $5.12 a barrel or 4 per cent last week to $113.20 a barrel or 77.96 cents a litre – also the lowest levels in almost six months. And with the wholesale price holding at a five week low, motorists should benefit from cheaper fuel prices over the medium term. In Australia, pump prices may fall by a further 2-3 cents a litre over the next fortnight in line with lower wholesale and world prices.

What do the figures show?

Petrol prices

According to the Australian Institute of Petroleum, the national average Australian price of unleaded petrol fell by 4.7 cents a litre to 152.6 c/l in the week to July 27. The slide in prices reflects an easing towards the trough in the discounting cycle that exists in southern and eastern capital cities. The metropolitan price fell by 4.7 cents to 152.6 c/l, while the regional average price fell by 1 cent to 155.8 c/l.

Average unleaded petrol prices across states and territories over the past week were: Sydney (down by 9.1 cents to 148.8 c/l), Melbourne (down by 7.3 cents to 149.3 c/l), Brisbane (down by 7.8 cents to 153.6 c/l), Adelaide (down by 3.5 cents to 150.6 c/l), Perth (down by 1.2 cents to 152.5 c/l), Darwin (unchanged at 173.0 c/l), Canberra (down 0.3 c/l to 156.6 c/l) and Hobart (down 0.2 c/l to 160.7 c/l).

Today, the national average wholesale (terminal gate) unleaded petrol price stands at 142.6 c/l, down around 1.7 cents over the week and the lowest level in five weeks.

Last week the key Singapore gasolineprice fell by US$4.20 or 3.5 per cent to a near 6-month low of US$116.70 a barrel. In Australian dollar terms the Singapore gasoline price fell by $5.12 a barrel or 4per cent last week to $113.20 a barrel or 77.96 cents a litre – also the lowest levels in almost six months.

Figures from MotorMouth show that petrol prices in Sydney, Melbourne, Brisbane, and Adelaide are now trending lower and are at or near the low point in the discounting cycle.

Why is the data important?

Weekly figures on petrol prices are compiled by ORIMA Research on behalf of the Australian Institute of Petroleum (AIP). National average retail prices are calculated as the weighted average of each State/Territory's metropolitan and non-metropolitan retail petrol prices, with the weights based on the number of registered petrol vehicles in each of these regions. AIP data for retail petrol prices is based on available market data supplied by MotorMouth.

What are the implications?

Petrol prices have largely trended sideways in 2014, but are now heading back towards the lows for the year. While that hasn’t proved a major weight on consumer sentiment, neither have lower petrol prices served to boost consumer sentiment.

There is still no imperative for the Reserve Bank to change interest rate settings.

Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.

 


New on Switzer

blog comments powered by Disqus

  THE SWITZER FEED
Pixel_admin_thumb_300x300 Pixel_admin_thumb_300x300 Pixel_admin_thumb_300x300 Pixel_admin_thumb_300x300 Pixel_admin_thumb_300x300 Pixel_admin_thumb_300x300