DIESEL fuel process across regional and rural Australia have continued their sustained slide, driven mostly by reduced global demand as expectations over economic growth in regions like China and Europe are adjusted downwards.
In essence, lower levels of economic activity means lesser demand for fuel.
International oil prices fell for a fourth straight month in September with Brent crude breaking through $90/barrel in October, on abundant supply, slowing demand growth and a stronger US dollar. Brent prices have fallen by more than 20pc since June, when turmoil in Iraq lifted prices to $116/barrel.
The softer demand side of the equation, especially out of China and Europe, has swept away any lingering concerns about supply out of the troubled oil producing regions of the Middle East, North Africa and the Ukraine.
Prices for diesel in rural and regional areas of Australia averaged 155.1c/litre earlier this week, easing a further 1c since this time last month, and back 5.4c since July.
The prolonged easing trend follows three months of stubbornly high diesel prices at or around 164c/litre at the start of the year.
Australia is only about 40 percent self-sufficient in transport fuels, meaning international market trends and currency have a direct impact on local pricing.
As the graph published here shows, prices have continued to slide during October. The latest survey for the week ended October 19 conducted by the Australian Institute of Petroleum shows a national average price for regional and rural areas of Australia at 155.1c/litre, down 9c/l since the start of the year, but still some way from the recent low-point in the cycle of 148c/l recorded back in May last year.
Based on this week’s AIP diesel price for regional/rural areas of Australia, filling a Toyota Landcruiser 200 series (138 litres, main and auxiliary tanks) today would cost $12.30 less than the same fill back in January.
Biggest declines in regional diesel price this month have been seen in the Northern Territory, Queensland and Victoria.
Regional non-metro diesel prices in the latest AIP report for the week ended Sunday included:
- Victoria 151.6c/litre (down 1.2c/litre since late September)
- NSW 155.9c (down 0.9c)
- Queensland 153.4c (down 1.7c)
- WA 160.4c (down 0.5c)
- SA 152.8c (down 0.3c)
- TAS 159.4c (down 1.4c), and
- NT 173.9c (down 1.9c).
The reported prices are calculated as a weighted average of retail diesel fuel for country regions in each state/territory. All values include GST.
Variation in fuel prices can have a considerable impact of cost of production across the Australian beef industry, impacting on livestock transport, cost of shipping in live cattle and boxed beef exports, pumping stock water and providing station electricity in remote locations.
Crude oil, diesel and petrol prices are closely linked, as the price of crude oil accounts for the majority of the cost of producing a litre of petrol or diesel. Crude oil is purchased in US$, 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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