Agribusiness

Diesel fuel prices lift off earlier lows

Jon Condon, 28/04/2015

diesel prices Apr 15

 

WITH world oil prices again on the rise, diesel fuel in regional and rural parts of Australia has risen about 5c/litre in price since early February.

The upwards trend follows sustained declines over the previous six months.

The Australian Institute of Petroleum’s weekly price report suggests prices for diesel in regional areas of Australia averaged 132.2c/litre for the week ended Sunday, 26 April  – up 1.6c/litre since our previous monthly report, but still down almost 24c/litre on prices seen as recently as early November.

At its high-point in January last year, average diesel prices in in rural areas of Australia were above 162c/litre.

The main reason for recent diesel price rises is a 15pc lift in world oil price, as global demand forecasts rise for the rest of this year, on the back of improved economic outlook, particularly from Europe,  China and the US.

Australia is only about 40 percent self-sufficient in transport fuels, meaning international market trends and currency have a direct impact on local pricing. The Australian cattle industry is heavily reliant on diesel fuel, used for livestock transport, water pumping and power generation.

The latest Australian Institute of Petroleum survey shows that 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 $41 less than the same fill this time a year ago, and $33 less than in late November.

All states and territories except South Australia and the Northern Territory lifted in price this month, with the biggest rises seen in Tasmania, Victoria and NSW.

Regional non-metro diesel prices in the latest AIP report for the week ended last Sunday included:

  • Victoria 128.9c/litre (up 2.1c since late March)
  • NSW 132.8c (up 2.6c)
  • Queensland 132.4c (up 1.2c)
  • WA 136.4c (up 1.1c)
  • SA 128.9c (down 0.5c)
  • TAS 136.9c (up 3.8c), and
  • NT 140.6c (down 0.2c).

 

Notes:

AIP’s 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.

 

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