DIESEL fuel prices have found an unusual level of stability since January, after experiencing sharp rises during the final three months of 2016.

Retail diesel prices in regional and rural areas of Australia have hovered around the 130c/litre mark for the past two months, reported by the Australian Institute of Petroleum for the week ended Sunday at 129.5c.

The International Energy Agency reports that demand for fuel oil has crept ahead of supply for the first time since early 2016, as major global oil producers agree to wind-back production.

“The market is still dealing with a vast amount of past supply, and surplus stocks, which will take time to work its way through the system,” the agency said. Demand is expected to continue to grow this year.

Diesel fuel remains a major input for many cattle producers in Australia, used for pumping water, generating power, and transporting livestock and inputs.

Diesel prices in regional/rural areas hit a 10-year low in the early stages of last year, falling during March to around 112c/litre. Current prices are the highest seen since September 2015.

Based on current average diesel prices for regional/rural areas of Australia, filling a Toyota Landcruiser 200 series (138 litres, main and auxiliary tanks) today would cost $178.70, about $25 more than it did this time last year.

Biggest price changes within states since our previous report in early February have been seen in Western Australia and Queensland.

Regional/rural non-metro diesel prices in the latest AIP report for the week ended last Sunday, March 26 included:

• Victoria 126.4/litre (down 0.4c/litre since early Feb)
• NSW 129.7c (down 1.3c)
• Queensland 129.7c (down 1.9c)
• WA 133.2c (down 2c)
• SA 126.7c (down 1c)
• TAS 136.2c (down 0.2c), and
• NT 133c (unchanged).

Worth noting is the fact that this month is only the third time in recent memory that the Northern Territory has not had the highest priced regional fuel in Australia, with Tasmania getting the glory since December.

Monthly diesel report notes:

Australian Institute of Petroleum’s reported prices are calculated as a weighted average of retail diesel fuel for non-metro regions in each state/territory. All values include GST.

Variation in fuel prices can have a considerable impact of cost of production across the Australian beef industry, impacting on livestock transport, cost of shipping in live cattle and boxed beef exports, pumping stock water and providing station electricity in remote locations.

Crude oil, diesel and petrol prices are closely linked, as the price of crude oil accounts for the majority of the cost of producing a litre of petrol or diesel. Crude oil is purchased in US$, meaning that changes in the value of the A$ against the US have a direct impact on the relative price of crude oil in A$ terms.