While showing none of the volatility seen earlier, diesel fuel prices across regional and rural parts of Australia this year have remained stubbornly high over the past two months, at near three-year peaks.
The softening Australian dollar and high demand for distillate-based fuels for heating during the bitterly cold northern hemisphere winter in the US and Europe have been blamed for diesel prices hitting, and staying at near-record levels since January.
As this graph shows, prices have eased only marginally since then. The latest survey conducted by the Australian Institute of Petroleum shows a national average price for regional and rural areas of Australia at 163.3c.litre for the week ended Sunday, March 16. That’s a decline of 0.9c/l since the mid-January high-point, but the figure is still more than 15c/litre above the recent low point in the cycle of 148c/l recorded back in May last year.
The recent decline in the value of the A$ – fairly stable at around US90c recently, after sitting above US104c this time last year – has made imported fuel oil more expensive. Australia is only about 40pc self-sufficient in transport fuels, meaning international market trends have a direct impact on local pricing.
Energy market analysts say political disturbances in the Russia/Ukraine region and the Middle East, have also contributed to the recent rise. Fuel traders say potential conflict in Ukraine has seen traders begin buying up stock in bulk, sparking an increase in prices due to a squeeze on supply. Should war break out, the impact would be even greater, potentially matching the first Gulf War when petrol prices skyrocketed.
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 almost $21 more than the same fill back in mid-May last year.
Biggest fuel price movement since last month was seen in Queensland, down 0.3c/l. The Northern Territory and South Australia went against the trend, recording small increases.
Regional non-metro diesel prices in the latest AIP report included:
- Victoria 160.4c/litre (down 0.1c/litre since mid-January)
- NSW 163.4c (down 0.1c)
- Queensland 163c (down 0.3c)
- WA 166.2c (down 0.1c)
- SA 162.1c (up 0.1c)
- TAS 168.5c (unchanged), and
- NT 178.5c (up 0.1c).
The prices are calculated as a weighted average of retail diesel fuel for country regions in each state/territory. All values include GST.
Variation in fuel prices can have a considerable impact of cost of production across the Australian beef industry, impacting on livestock transport, cost of shipping in live cattle and boxed beef exports, pumping stock water and providing station electricity in remote locations.
Crude oil, diesel and petrol prices are closely linked, as the price of crude oil accounts for the majority of the cost of producing a litre of petrol or diesel. Crude oil is purchased in US$, 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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