According to the official data, the national petrol price rose by 1.0 cent a litre last week. And unfortunately for motorists there is likely to be further price hikes ahead. Unless there is some change in the next week or so, motorists will be hit by the double-whammy of higher crude prices and a weaker Aussie dollar – pushing up the cost of imported fuel.
In short motorists should brace for more pain at the petrol pump. The regional Singapore gasoline price has surged to a near three-month high in Australian dollar terms, and if current global prices are maintained, the wholesale (terminal gate) price should lift in coming days, eventually filtering through to domestic pump prices. Around 2-3 cents is likely to be added to the pump price over the next 7-10 days.
The current average petrol price of just over $1.47 a litre is still well below the all-time high of $1.634 a litre in July 2008. While the rising petrol price is bad news for retailers, wages have lifted around 14 per cent over the past four years while the petrol price is actually lower.
Fortunately, pump prices have been rising off a low base (a five-month low) and across most capital cities the
discounting cycle is likely to peak in the next couple of days.
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific's leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
