DIESEL fuel prices in regional and rural areas of Australia have softened further to reach their equal lowest point in eight months.

Pricing data released by the Australian Institute of Petroleum shows that for the week ended Sunday, April 21, the average retail price for diesel in non-metropolitan country areas fell to 151.6c/litre, at least 3.5c/litre lower than where it sat as recently as February.

Singapore crude oil prices are still in decline, and given the two-week lag period in pricing seen in Australia, it suggests prices may fall further in coming weeks, energy commentators suggest.

Slower-than-expected world economic growth, increases in oil production in North America and the Middle East, and substantial oil stocks have been blamed for the recent decline in price. Oil stocks have been at a surplus to five-year average levels for six months.

As a result diesel pump prices have fallen in all States and territories over the past month, with the biggest drops seen in South Australia, Queensland and Western Australia.

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

• Victoria 149.1c/l (down 1.6c/litre since late March)
• NSW 151.5c (down 1.4c)
• Queensland 151.1c (down 1.9c)
• WA 155.8c (down 1.9c)
• SA 149.0c (down 3.2c)
• TAS 156.6c (down 0.6c), and
• NT 169.1c (down 1.2c).

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.

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