According to the Australian Institute of Petroleum, the national average Australian price of petrol fell by 3.0 cents per litre to 128.3 cents per litre in the week to October 18…
In fact, domestic pump prices have fallen for eight of the past ten weeks and are now holding at 7½-month lows.
Last week production data confirmed that OPEC nations pumped 31.57 million barrels per day in September – the most crude oil added to the market in three years. The move by OPEC is in effect designed to curtail US shale oil production. And while the higher production continues to produce a fall in the number of oil rigs drilling for oil in the US, over the near-term it will also weigh on prices. In addition the lift in the Australian dollar will also add to further savings at the pump. The Singapore unleaded price has now fallen by over A$7 in the past fortnight to A$87.18 a barrel – a 7-week low – and should continue to filter through to pump prices.
The decline in world oil prices is a net positive for consumers and businesses across the globe. But the development is not without negative consequences. The speed of the fall in oil prices and recent volatility creates uncertainties for investors and businesses…
Petrol is trading almost 21c a litre lower than a year ago, saving the average household almost $25 a month to fill up the car with fuel…
While the vagaries of the discounting cycle continues to be the key driver of such vast shifts in pump prices across the nation, motorists can still benefit. The discounting cycle provides the best opportunity to purchase fuel at or below the cost (terminal gate) price – and in turn save a few extra dollars. Between the peak and the trough in the cycle motorists could save themselves as much as 20 cents a litre.
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
