DIESEL fuel prices across regional and rural areas of Australia started to rise during August and September, after seven months of gradual declines.
Prices in regional areas reached their recent low-point in early August averaging around 126c/l, before climbing over the past six weeks.
As our graph shows, at the start of the year, prices firstly leapt to 131c, before beginning a gradual downwards trend over the next eight months.
The most recent weekly report issued by the Australian Institute of Petroleum for the week ended Sunday, September 24 has retail diesel prices in non-metropolitan regional areas of the country averaging 127.3c/litre. That’s virtually the same as in our previous diesel report, published in late June.
Global fuel oil supply has been impacted on a number of fronts, including renewed turmoil in the large producing state of Libya, and disrupted flows on the US Gulf coast due to severe weather events – Hurricane Harvey and Hurricane Irma.
For the remainder of 2017, analysts expect demand growth to be stronger than expected, particularly in Europe and the US. Based on recent futures trading, investors’ expectations are that markets are tightening and that fuel prices will rise.
With recent tensions in the Arabian Gulf oil producing region, prices could again start to lift heading into 2018, International Energy Agency commentators suggest.
Diesel fuel remains a major input for many cattle producers in Australia, used for pumping water, generating power, and transporting livestock and inputs.
Based on current average diesel prices for regional/rural areas of Australia, filling a Toyota Landcruiser 200 series (138 litres, main and auxiliary tanks) today would cost $175.53, about $14 more than it did this time last year, when the price was around 118c/l.
Biggest price changes within states since our previous late-June report have been seen in South Australia.
Regional/rural (non-metro) retail diesel prices in the latest AIP report for the week ended last Sunday, September 24 included:
- Victoria 124.9c/litre (down 0.1c since late June)
- NSW 127.2c (down 0.2c)
- Queensland 127c (up 0.2c)
- WA 131.1c (down 0.1c)
- SA 125.2c (up 0.4c)
- TAS 135.4c (unchanged), and
- NT 133c (unchanged).
Worth noting is the fact that this report is only the fourth time that the Northern Territory has not had the highest priced regional diesel fuel in Australia, with Tasmania getting the glory since December.
Monthly diesel report notes:
Australian Institute of Petroleum’s reported prices are calculated as a weighted average of retail diesel fuel for non-metro regions in each state/territory. All values include GST.
Variation in fuel prices can have a considerable impact of cost of production across the Australian beef industry, impacting on livestock transport, cost of shipping in live cattle and boxed beef exports, pumping stock water and providing station electricity in remote locations.
Crude oil, diesel and petrol prices are closely linked, as the price of crude oil accounts for the majority of the cost of producing a litre of petrol or diesel. Crude oil is purchased in US$, meaning that changes in the value of the A$ against the US currency have a direct impact on the relative price of crude oil in A$ terms.