DIESEL fuel prices continued to fall away sharply during September, as reduced global demand over-whelmed any underlying concerns about supply out of the troubled key oil producing regions of the Middle East, North Africa and the Ukraine.
A pronounced slowdown in global demand growth in the quarter ended September 30 and a weaker economic outlook for Europe and China underpinned the downward movements. In simple terms, less economic activity equals less diesel consumption.
Prices for diesel in rural and regional areas of Australia averaged 156.1c/litre earlier this week, easing a further 1.8c since this time last month, and back 4.4c since July.
The consistent easing trend follows three months of stubbornly high diesel prices at or around 164c/litre at the start of the year.
Australia is only about 40 percent self-sufficient in transport fuels, meaning international market trends have a direct impact on local pricing.
As the graph published here shows, prices have continued to slide during September. The latest survey for the week ended September 21 conducted by the Australian Institute of Petroleum shows a national average price for regional and rural areas of Australia at 156.1c/litre, down 8c/l since the start of the year, but still some way from the recent low-point in the cycle of 148c/l recorded back in May last year.
Based on this week’s AIP diesel price for regional/rural areas of Australia, filling a Toyota Landcruiser 200 series (138 litres, main and auxiliary tanks) today would cost $12 less than the same fill back in January.
Biggest declines in regional diesel price this month have been seen in Tasmania and Queensland, while the NT was little changed.
Regional non-metro diesel prices in the latest AIP report for the week ended Sunday included:
- Victoria 152.8c/litre (down 1.4c/litre since late August)
- NSW 156.8c (down 1.8c)
- Queensland 155.1c (down 2.2c)
- WA 160.9c (down 0.9c)
- SA 153.1c (down 1.6c)
- TAS 161.3c (down 3.5c), and
- NT 175.8c (down 0.2c).
The reported prices are calculated as a weighted average of retail diesel fuel for country regions in each state/territory. All values include GST.
Variation in fuel prices can have a considerable impact of cost of production across the Australian beef industry, impacting on livestock transport, cost of shipping in live cattle and boxed beef exports, pumping stock water and providing station electricity in remote locations.
Crude oil, diesel and petrol prices are closely linked, as the price of crude oil accounts for the majority of the cost of producing a litre of petrol or diesel. Crude oil is purchased in US$, 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.