The recent decline in the value of the Australian dollar, making imports more expensive, has seen a lift in diesel fuel prices since October.
Australia is only about 40pc self-sufficient in transport fuels.
As the accompanying graph prepared by the Australian Institute of Petroleum shows, prices in regional, non-metropolitan areas of the continent have started to trend upwards again after a lengthy period of stability.
The AIP diesel report for the week ending Sunday, November 20, shows a national average retail diesel price in rural and regional (non-metropolitan) areas of Australia of 149.6c/litre, up almost a cent on the same time in October.
The 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 include GST.
Prices rose across most state and territory regional/country areas, with Victoria worst hit, rising 1.7c/l compared with this time in October.
At a state-by-state level, non-metropolitan regional diesel prices in this week's report included:
- Victoria 148.2c/l (up 1.7c on last month)
- NSW 150.9c (down 0.7c)
- Queensland 150.7c (up 0.5c)
- WA 154.7c (up 0.9c)
- SA 150.7c (up 0.2c)
- TAS 152.8c (up 0.5c), and
- NT 164.3c (down 4.5c).
As the accompanying graph shows, national prices reached a high-point around 157c/l in early April, before beginning to ease in early May. 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 have remained fairly stable, but are now tipped to rise leading into the New Year.
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, the AIP says. Crude oil is purchased in US dollars, meaning that changes in the value of the A$ against the US$ has a direct impact on the relative price of crude oil in A$ terms.
Economists warn that there is likely to be more increase in diesel and petrol fuel prices ahead, as world oil prices jumped 5pc during October, The benchmark TAPIS crude oil price rose to $116 a barrel this week.
Energy industry analysts say the Euro zone debt crisis influenced fuel market sentiment in late October and early November, although ultimately fundamentals reasserted themselves in pricing later this month.
Futures prices for benchmark crudes diverged in October, with WTI on a solid upward trend while Brent crude eased. Yesterday, Brent traded around $114/bbl, with WTI at $96/bbl.
Click on the image here for a better view of recent regional Australian diesel price trends.