WHILE it’s great for beef export prospects, a falling A$ is not good news for fuel prices, Beef Central’s monthly diesel price watch shows.
Diesel fuel in regional and rural areas of Australia has continued to climb in price over the past month, hitting three-year highs during August. That follows nine-month lows as recently as May, when prices fell to 148c/litre.
Pricing data released by the Australian Institute of Petroleum shows that for the week ended Sunday, August 25, the average retail price for diesel in country areas rose to 159.1c/litre, about 11c/litre higher than where it sat this time in May (see graph below).
Analysts say both diesel and petrol prices are likely to rise further, as the effect of the 14pc decline in the value of the A$ compared with the US$ over the past two months continues to take effect.
Australia is only about 40pc self-sufficient in transport fuels, meaning international market trends have a direct impact on local pricing.
"Higher crude prices and a substantially weaker Aussie dollar, pushing up the cost of imported fuel, have seen domestic pump and wholesale prices rise considerably over the past few weeks," an energy sector analyst said.
"Had the Aussie dollar remained at levels it was three months ago (US105c) fuel users now would be saving around 12c/litre of petrol or diesel."
The currency impact has been seen in rises in regional and rural areas in all Australian States and territories over the past month, with the biggest jumps seen in South Australia, Victoria and NSW.
Regional non-metro diesel prices in the latest AIP report included:
- Victoria 156.5c/l (up 8.8c/litre since late June)
- NSW 159.0c (up 8.7c since late June)
- Queensland 158.8c (up 7.9c)
- WA 162.4c (up 7.7c)
- SA 158.0c (up 9.1c)
- TAS 161.8c (up 7.5c), and
- NT 174.3c (up 6.7c).
The 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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