According to the Australian Institute of Petroleum, the national average Australian price of unleaded petrol fell by 5.8 cents per litre to 109.3 cents per litre in the week to February 21 – the lowest level in a year. Prices need to fall just 0.7 cents to 7-year lows.
The terminal gate (wholesale) price of unleaded petrol today is averaging 96.5 cents a litre – the lowest level in seven years (January 8 2009).
More capital cities are experiencing petrol prices below or near $1 a litre. And subject to the vagaries of the discounting cycle, more motorists will be filling up near $1 a litre in the next fortnight. The national petrol price is the lowest in a year, and given trends in regional gasoline prices, and the fact that the Australian wholesale price is holding at the lowest levels in seven years, average pump prices have scope to fall further.
However in Sydney, Adelaide and Perth, petrol is selling virtually at or very close to cost and in the short term it suggests the time to fill up is now.
Filling up the car with petrol is the single biggest weekly expenses for most families. Compared with June last year, the average household is saving around $56 a month on filling up the car with petrol, equivalent to a half a percent rate cut on a $180,000 mortgage.
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.
