A softer Australian dollar has not yet translated into movement in diesel fuel prices, although an easing in political unrest in the Middle East and weakening demand for energy products in China could see pump and wholesale prices trend downwards in coming months.
The Australian Institute of Petroleum report for the week ending Sunday, August 21, shows a national average retail diesel price in rural and regional (non-metropolitan) areas of Australia of 149.9c/litre.
That’s exactly the same figure as in Beef Central's corresponding report last month.
Prices were remarkably stable across state and territory regional/country areas over the past month, after some earlier choppier trends.
With cost of production pressures rising and livestock only now starting lift again, any savings in diesel fuel costs will be welcome relief to beef producers – particularly those in more remote regions where transport distance and freight costs are higher.
At a state-by-state level, regional diesel prices in this week's report included:
- Victoria 145.7c/l (same as last month)
- NSW 150.5c (down 0.2c on July)
- Qld 149.4c (down 0.1c)
- WA 152.1 (down 0.1c)
- SA 150.7c (up 0.2c)
- Tas 153.3c (down 0.2c), and
- NT 168.1c (up 0.3c).
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 convern about the global economy started to emerge.
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, AIP 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 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.
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 are inclusive of GST.
Energy market commentators suggest there is still further downside likely in diesel fuel prices, particularly if pessimism about the global economic prospects linger.
Click on the image here for a better view of recent regional Australian diesel price trends.
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