Diesel fuel prices have continued to surge to new three-year highs, despite the recent rally in currency value.

As can be seen in the graph on this page, the strong surge in prices experienced last month as the A$ declined in value against the US$ have continued, in spite of the recent correction with has seen the A$ again move upwards, to US93-94c.

Pricing data released by the Australian Institute of Petroleum shows that for the week ended Sunday, September 22, the average retail price for diesel in country areas rose to Nat 161.2c/litre, 1.1c/litre higher than where it sat this time a month ago.

That follows nine-month lows seen as recently as May, when prices fell to 148c/litre.

Analysts say both diesel and petrol prices are likely to rise further, as the longer-term effect of the 14pc decline in the value of the A$ compared with the US$ over the past two months continues to have an impact.

Australia is only about 40pc self-sufficient in transport fuels, meaning international market trends have a direct impact on local pricing.

Had the Aussie dollar remained at levels it was four months ago (US105c) fuel users now would be saving around 13c/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 Western Australia, Tasmania and South Australia.

Regional non-metro diesel prices in the latest AIP report included:

• Victoria 158.9c/litre (up 2.4c/litre since this time last month)
• NSW 160.9c (up 1.9c)
• Queensland 160.5c (up 1.7c)
• WA 164.9c (up 2.4c)
• SA 160.0c (up 2.0c)
• TAS 165.3c (up 3.5c), and
• NT 176.1c (up 1.8c).

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.