OUTSIDE wages, fuel and energy costs are one of the big production inputs across the cattle industry, but fortunately diesel prices are continuing their strong recent downwards trend.
The Australian Institute of Petroleum’s weekly price report for the week ended Sunday, October 25 indicates prices for diesel in non-metro regional areas of Australia averaged 130.1c/litre, another 1c/litre drop since our previous report in late September, and back almost 7c/l since late July.
Current pricing is 31c/litre better than the high-point in January last year, when average diesel prices in rural areas of Australia were above 162c/litre. As the above graph shows, prices still have a way to go to reach their low point back in February this year, however, when average regional prices were down around 127c/litre.
The downwards pressure currently being seen on price is being impacted as global fuel demand wanes because of economic slowdown in China and elsewhere. A projected marked slowdown in demand growth next year and the anticipated arrival of additional Middle Eastern supply are likely to keep the fuel market oversupplied through 2016, analysts say.
For now, lower oil prices are supporting stronger demand growth, with the world’s top consumers, the US and China, now buying more oil.
Australia is only about 40 percent self-sufficient in transport fuels, meaning international market trends and currency have a direct impact on local pricing. The Australian cattle industry is heavily reliant on diesel fuel, used for livestock transport, water pumping and power generation.
The latest Australian Institute of Petroleum weekly survey shows that 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 $180 – almost $30 less than the same fill this time last year.
All regions have seen declines in pump prices since September, with the biggest drops seen in Queensland, NSW and Tasmania.
Regional non-metro diesel prices in the latest AIP report for the week ended last Sunday included:
- Victoria 125.8c/litre (down 0.6c since late September)
- NSW 129.2c (down 1.3c)
- Queensland 131.3c (down 1.6c)
- WA 136.5c (down 0.7c)
- SA 126.6c (down 0.2c)
- TAS 137.7c (down 1c), and
- NT 138.2c (down 0.3c).
Monthly diesel report notes:
Variation in fuel prices can have a considerable impact of cost of production across the Australian beef industry, impacting on livestock transport, cost of shipping in live cattle and boxed beef exports, pumping stock water and providing station electricity in remote locations.
Crude oil, diesel and petrol prices are closely linked, as the price of crude oil accounts for the majority of the cost of producing a litre of petrol or diesel. Crude oil is purchased in US$, 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.