Motorists across the country have noticed the skyrocketing cost of gasoline, which has surpassed $2 in every capital city in Australia.
An expert confirmed that retail fuel prices are the highest the country has seen in more than 20 years, and amid a cost of living crisis, residents everywhere are feeling the sting.
We spoke to an expert to answer our burning questions about the best time to buy gas, how to save money when refueling, and when prices will eventually drop.
Why is fuel so expensive?
The perfect storm of the Covid-19 pandemic and the war between Russia and Ukraine has pushed fuel prices to their highest levels in more than 20 years.
CEO of the Australasian Convenience and Petroleum Marketers Association (ACPMA), Mark McKenzie, said gasoline prices are rising significantly due to the disrupted global supply chain.
“The factors driving fuel prices in Australia have nothing to do with the Australian market,” he said.
Camera IconAustralia’s gas prices now surpass dizzying heights. Richard Gosling Credit: News Corp Australia
“They remain the rising global oil price and the Australian/US dollar drifting sands.”
He said “supply chases demand” since oil demand fell 55 percent during the pandemic and suppliers shut down production. The war involving Russia, one of the world’s largest oil suppliers, effectively eliminated 10 percent of the world’s oil supply.
“We continue to see speculation in the trading market as to where the price will be in the future, and that continues to drive prices up at the moment,” said M.r McKenzie.
What is the government doing to help?
After fuel prices hit their highest level in 14 years, the former federal government stepped in to halve the tax Australians pay on fuel.
However, reducing the fuel tax to 22.1 c per liter is only a six-month stopover. It was introduced in March and will expire in September when the tax paid on fuel returns to 44.2 cents per liter.
While the fuel tax cut sent fuel prices plummeting in the weeks following the announcement, gasoline prices have recovered to record highs.
The ACCC noted that normal prices for unleaded gasoline increased by 46 cents per liter between mid-April and mid-June. According to data from Fuel Price Australia, petrol prices are just a penny below the spike that prompted the government to intervene.
How do the cities relate to each other?
Data from the Australian Institute of Petroleum shows that prices across the country are higher than ever.
In the week ending June 19, the country’s capital had the highest petrol price at 226.5 cents per liter, followed by Sydney at 222.6 cents per liter.
Camera icon Every capital city in Australia has seen fuel prices rise above $2 a liter. Brenton Edwards Credit: News Corp Australia
Adelaide’s fuel price was not far behind at 221.2c per liter, followed by Brisbane at 220.2c per liter. Melbourne’s fuel costs 217.1c, while Perth’s slightly cheaper fuel is 214.8c per liter.
Hobart has the second lowest petrol price in the country at 209.6c, but Darwin drivers get the best bargain at 205.7c per liter.
How high will gasoline prices go?
According to Mr. McKenzie, “it’s a gamble”.
The petrol consumer expert said average petrol prices are the highest Australia has experienced in more than 20 years. Regular unleaded gasoline now costs 30 percent more than six months ago, with drivers paying at least $23 more for a tankgas.
Mr. McKenzie said the world was in an “extraordinary situation” with its first pandemic in 100 years and the biggest European war since World War II.
“When you put those factors together, it’s almost impossible to predict where the price will go,” he said.
“The only thing that is certain at this point is volatility.”
The bill at the Bowser will depend on the international oil market. Right now, oil prices fluctuate between 3 and 5 percent daily, which McKenzie said was “unheard of.”
When will prices fall?
Unfortunately, it doesn’t seem likely that the price of petrol will fall soon.
With the current unpredictable swings in oil prices, the ACPMA CEO said prices would continue to rise.
Camera IconPeople pay record-high prices for fuel in Australia. NCA NewsWire/John Gass Credit: News Corp Australia
“While supply and demand remain as tight as they are today, all we can see going forward is upward pressure,” he said.
“Maybe not as steep as we’ve seen in recent months, but still incrementally up.”
He said the lack of an international consumer watchdog made it difficult to force international oil suppliers to increase production.
“These prices will only fall if we get something that starts to increase supply… or something that pulls demand back,” he said.
Although it sounds very pessimistic, Mr. McKenzie warned that this is uncharted territory. He said there could be an opportunity to rebalance the oil market, but it would require significant investment.
How do I save on fuel?
As it seems we’ve been dealing with rising petrol prices for a while, Mr. McKenzie gave some tips for saving money when refueling.
First and foremost, it’s important to shop around. Mr. McKenzie recommends downloading one of the many fuel price comparisons apps, such as Fuel Check, Motor Mouth, or Petrol Spy.
Experts say that camera IconAustralians should use fuel price comparison apps to ensure they get the best bargains. NCA NewsWire/Dan Peled Credit: News Corp Australia
The gasoline consumer expert said the apps are “key” for navigating the capital’s price cycles, where gasoline could fluctuate by 20 cents over a few weeks. By viewing the app price, drivers can ensure they are not paying to fill their tanks at the most expensive point in the price cycle.
Mr. McKenzie also warned that fuel prices vary widely from service station to service station.
“The price on any given day can vary between 10c and 12c, so it’s worth shopping around,” he said.
He said drivers could save an average of $5 filling an average 50-gallon tank by being smart. The gasoline industry works with the government to ensure that gasoline data is current and accurate, so the apps are a good resource for those suffering from rising costs.
