After showing strong volatility during much of 2012, diesel fuel prices in regional and country areas of Australia have stabilised during December, with the national average finding a level at around 152c/litre.

Weekly average diesel prices in most states and territories are now at their lowest level since early September, having varied by up to 12c/l during the past 12 months.

The recent softening in price seen in this graph since the highs of late October is due to softening in crude oil prices caused by the recent strengthening in the Australian dollar, and lower global demand for diesel due to the Global Economic Crisis.

The graph is based on weekly price reporting information released by the Australian Institute of Petroleum.

Nationally, diesel prices in country areas for the week ended Sunday, December 16 averaged 152.4c/litre, down 0.6c/l on a month earlier, but still 6c/l above rates in August before the most recent rising trend started.

Benchmark crude oil prices trended down in early December, with WTI last trading at $85.90/bbl and Brent at $107.85/bbl.

Information released by the Australian Institute of Petroleum (click on image at bottom of page for a larger view) for the week ending December 16 showed prices in all states and territories stable to slightly lower than a month ago, with biggest downwards movements seen in Queensland, South Australia and Tasmania.

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

• Victoria 149.9c/l (down 0.2c on November)
• NSW 152.2c (down 0.7c)
• Queensland 151.5c (down 0.8c)
• WA 155.8c (down 0.5c)
• SA 151.6c (down 0.9c)
• TAS 156.4c (down 0.8c), and
• NT 166.9c (down 0.7c).

The prices are calculated as a weighted average of retail diesel fuel prices for country regions in each state/territory. All values include GST.

Variation in fuel oil 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 currency have a direct impact on the relative price of crude oil in A$ terms.

•  Click on the image here for a better view of recent regional Australian diesel price trends.