Diesel fuel prices in non-metropolitan areas of Australia have stabilised at an average retail price of about 152c/l during early stages of 2012, recent industry data shows.
Information released by the Australian Institute of Petroleum (see graph) shows prices are currently about 2c/l higher than where sat during the October-November period last year, but a little softer than where they sat this time a month ago.
International oil markets began the New Year confronting a host of supply issues, not least a pending EU ban on Iranian oil imports and retaliatory threats from Tehran to close the Strait of Hormuz, through which flows roughly one-third of world oil exports. Oil prices jumped $4-$5/barrel on the reports, but have since eased on mounting Euro Zone debt issues.
Clear signs of economic weakness and mild northern hemisphere weather tipped global oil demand into a declining year-on-year trend at the end of 2011. Global oil demand growth for 2012 has now been trimmed by 1.1 million barrels, down about 11pc from earlier estimates.
Lower demand could lead to lower diesel prices as the year progresses, some analysts argue.
Crude oil, diesel and petrol prices are closely linked, as the price of crude oil accounts for the majority of the cost of producing a litre of petrol or diesel. Crude oil is purchased in US$, meaning that changes in the value of the A$ against the US currency have a direct impact on the relative price of crude oil in A$ terms.
Australia is only about 40pc self-sufficient in transport fuels, meaning international market trends have a direct impact on local pricing.
The AIP diesel price report for the week ending January 15 showed a national average retail diesel price in rural and regional (non-metropolitan) areas of Australia of 151.8c/litre, down 0.7pc from the same time last month.
The price is calculated as a weighted average of retail diesel fuel prices for country regions in each State/Territory. All values are in cents per litre and include GST.
Prices eased slightly across all State and Territory regional/country areas in January, with Victoria and NSW recording to biggest declines compared with the same time in December.
At a state-by-state level, regional diesel prices in the recent AIP report included:
- Victoria 149.3c/l (down 0.8c on December)
- NSW 151.5c (down 0.8c)
- Queensland 151.4c (down 0.6c)
- WA 156c (down 0.5c)
- SA 150.9c (down 0.7c)
- TAS 153.8c (unchanged), and
- NT 164.6c (down 0.1c).
As the graph shows, national prices reached an annual high-point around 157c/l in early April last year, before easing from June. This was around the time the A$ value softened off extreme levels above US109c and the second wave of concern emerged about the global economy.
Since then, prices remained fairly stable through to November, but then started to climb.
Variation in diesel prices can have a considerable impact of cost of production across the Australian beef industry, impacting on livestock transport, cost of shipping in live export, pumping stock water from underground sources and providing station electricity in more remote locations.
• Click on the image here for a better view of recent regional Australian diesel price trends.