Diesel fuel prices in country and regional areas of Australia have climbed sharply over the past month as global geopolitical issues and supply shortages take effect.
Pump prices for diesel in country/regional areas of Australia averaged 152.7c over the past four weeks, up almost 1c/l on February.
Information released by the Australian Institute of Petroleum (see graph) shows prices are currently equal to the recent market high-point seen in late November, and the highest point since April last year when they went to +157c/l.
The international oil market report says the reason for recent rises is escalating supply-side risks. Geopolitical tension in North Africa and the Middle East and unplanned outages in non-OPEC oil-producing countries dented last month’s supply, while potential additional losses relating to Iran added more uncertainty for the crude oil outlook. Oil futures prices were last week trading around $125/bbl (Brent) and $106/bbl (WTI).
The Australian Institute of Petroleum’s diesel price report for the week ending March 18 showed prices higher in all states and territories, compared with this time last month. Queensland, WA and SA were the worst-hit.
Regional diesel prices in the recent AIP report included:
- Victoria 149.2c/l (up 0.8c on February)
- NSW 152.2c (up 0.9c)
- Queensland 152.2c (up 1.1c)
- WA 157.0c (up 1.4c)
- SA 152.1c (up 1.3c)
- TAS 154.9c (up 0.9c), and
- NT 165.4c (up 0.8c).
The prices are calculated as a weighted average of retail diesel fuel prices for country regions in each State/Territory. All values are in cents per litre and include GST.
Variation in diesel prices can have a considerable impact of cost of production across the Australian beef industry, impacting on livestock transport, cost of shipping in live export, pumping stock water and providing station electricity in remote locations.
Crude oil, diesel and petrol prices are closely linked, as the price of crude oil accounts for the majority of the cost of producing a litre of petrol or diesel. Crude oil is purchased in US$, 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.
Australia is only about 40pc self-sufficient in transport fuels, meaning international market trends have a direct impact on local pricing.
Motoring group NRMA said for every 10 cents a litre increase in petrol or diesel a family in outer western Sydney would spend an extra $300 a year commuting to the Sydney CBD for work.
"Our dependency on fuel, mostly from unstable parts of the world, only adds to uncertainty,'' NRMA president Wendy Machin said.
- Click on the image here for a better view of recent regional Australian diesel price trends.