AFTER two or three years of dramatic and often sharp rises and falls, diesel fuel prices across regional parts of Australia have been remarkably stable during the first half of 2017.
Prices have traded in a narrow 4c/litre range since January, between 127-131c/litre.
That contrasts with huge sweeps as low as 112c/l in March last year (a ten year low), to 157c/l a year or so earlier.
A more stable Australian currency and closer alignment between global fuel oil supply and demand are some of the reasons for recent price stability, making it easier for primary producers to budget their fuel costs.
However, with recent tensions in the Arabian Gulf oil producing region, prices could again start to rise heading into 2018, International Energy Agency commentators warn. Immediate concerns about stubbornly high fuel oil stocks due to rising global production are keeping a lid on fuel prices, however.
As our graph above shows, retail diesel prices in regional and rural areas of Australia have hovered around the 128c/litre mark since Beef Central’s last diesel fuel report in March. The most recent weekly report issued by the Australian Institute of Petroleum for the week ended Sunday 25 June logged an average of 127.5c.litre.
Diesel fuel remains a major input for many cattle producers in Australia, used for pumping water, generating power, and transporting livestock and inputs.
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 $175.60, only about $6 more than it did this time last year, when the price was around 123c/l.
Biggest price changes within states since our previous March report have been seen in Queensland and NSW.
Regional/rural (non-metro) retail diesel prices in the latest AIP report for the week ended last Sunday, June 25 included:
- Victoria 125c/litre (down 1.4c since March)
- NSW 127.4c (down 2.3c)
- Queensland 126.8c (down 2.9c)
- WA 131.2c (down 2c)
- SA 124.8c (down 1.9c)
- TAS 135.4c (down 0.8c), and
- NT 133c (unchanged).
Worth noting is the fact that this report is only the third time in recent memory that the Northern Territory has not had the highest priced regional fuel in Australia, with Tasmania getting the glory since December.
Monthly diesel report notes:
Australian Institute of Petroleum’s reported prices are calculated as a weighted average of retail diesel fuel for non-metro regions in each state/territory. All values include GST.
Variation in fuel prices can have a considerable impact of cost of production across the Australian beef industry, impacting on livestock transport, cost of shipping in live cattle and boxed beef exports, pumping stock water and providing station electricity in remote locations.
Crude oil, diesel and petrol prices are closely linked, as the price of crude oil accounts for the majority of the cost of producing a litre of petrol or diesel. Crude oil is purchased in US$, meaning that changes in the value of the A$ against the US currency have a direct impact on the relative price of crude oil in A$ terms.