DIESEL fuel prices in regional and rural parts of Australia have lifted another 1.3c/litre on average over the past month, in response to world oil prices and global demand again on the rise.
The oil price rises come despite high global supply and continued stockpile growth, but perhaps more accurately reflect forecasts for higher global fuel demand through the rest of 2015.
The recent gentle upwards price trend follows sustained declines experienced in diesel prices across regional Australia during the back half of last year.
The Australian Institute of Petroleum’s weekly price report indicates prices for diesel in non-metro regional areas of Australia averaged 133.5c/litre for the week ended Sunday, May 17 – up 1.3c/litre since our previous report last month, but still down almost 22c/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.
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 almost $40 less than the same fill this time a year ago, and $30 less than in late November.
All regions except the Northern Territory lifted in price this month, with the biggest rises seen in Tasmania and South Australia.
Regional non-metro diesel prices in the latest AIP report for the week ended last Sunday included:
- Victoria 128.9c/litre (up 1.2c since late April)
- NSW 133.5c (up 0.7c)
- Queensland 133.6c (up 1.2c)
- WA 137.8c (up 1.4c)
- SA 131.4c (up 2.5c)
- TAS 140.5 (up 3.5c), and
- NT 140.1c (down 0.5c).
AIP’s reported prices are calculated as a weighted average of retail diesel fuel for country regions in each state/territory. All values include GST.
Variation in fuel prices can have a considerable impact of cost of production across the Australian beef industry, impacting on livestock transport, cost of shipping in live cattle and boxed beef exports, pumping stock water and providing station electricity in remote locations.
Crude oil, diesel and petrol prices are closely linked, as the price of crude oil accounts for the majority of the cost of producing a litre of petrol or diesel. Crude oil is purchased in US$, 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.