A rising A$ this week could renew pressure on diesel fuel prices, after a lengthy period of stability in pricing across regional areas of Australia.
Economists warn that there is likely to be more increase in diesel and petrol fuel prices ahead, as world oil prices jumped another 5pc during October, with the price of crude oil rising $4 a barrel overnight in New York at one point this month, demonstrating high volatility in the market.
The Australian Institute of Petroleum report for the week ending Sunday, October 23, shows a national average retail diesel price in rural and regional (non-metropolitan) areas of Australia of 150.6c/litre up almost a cent on a month ago, and the first significant rise seen in some time.
Prices rose across most state and territory regional/country areas, with Western Australian the worst affected, where the weekly average compared with this time in September was up 1.2c/l.
At a state-by-state level, non-metropolitan regional diesel prices in this week's report included:
- Victoria 146.5c/l (up 0.9c down on last month)
- NSW 151.6c (up 0.4c on September)
- Queensland 150.2c (up 0.9c)
- WA 153.8c (up 1.2c)
- SA 150.5c (down 0.4c)
- TAS 152.3c (down 0.5c), and
- NT 168.8c (up 0.6c).
As the accompanying graph shows, national prices reached a high-point around 157c/l in early April, before beginning to ease in early May around the time the A$ value softened off extreme levels above US109c and the second wave of concern about the global economy started to emerge.
Since then, prices have moved surprisingly little, but are tipped to trend upwards leading into the New Year.
Crude oil, diesel and petrol prices are closely linked, as the price of crude oil accounts for the vast majority of the cost of producing a litre of petrol or diesel, the Australian Institute of Petroleum says. Crude oil is purchased in US dollars, 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.
The big rise in regional prices evident in the graph started around the end of February, when retail diesel was worth around 140c/l – still 6.4pc percent below where prices currently sit.
Today's price is still more than 12pc above the low-point in the market at the start of December last year.
The AIP national regional average price is calculated as a weighted average of retail diesel fuel prices for non-metropolitan and country regions in each State/Territory, where the weighting is based on the number of vehicles using diesel fuel. All values are in cents per litre and include GST.
Click on the image here for a better view of recent regional Australian diesel price trends.