PETROL prices are at a five-year low and are set to fall further, dropping below 99c/litre that’s currently being offered in some outlets in New South Wales, the cheapest in Australia.
“What we see in Australian wholesale fuel prices is a reflection of the international market, and we’re seeing prices coming down,” says the Australasian Convenience and Petrol Marketers Association (ACPMA) CEO, Nic Moulis. That’s seen prices plummet below the $1.00/litre mark for the first time since 2009, giving motorists a reprieve in the traditionally fiscally challenging January.
The average metropolitan price average has fallen from as high as $1.57/litre in the last four weeks to its current $1.21/litre.
Globally, OPEC (Organisation of the Petroleum Exporting Countries) has increased supply to counter the USA’s increased production and push to self-sufficiency, which has seen OPEC produce a glut of oil and prices plummet. The cost of crude oil has fallen more than fifty percent since June, with yesterday’s closing price of $47.93/barrel the lowest since April 2009.
The savings look set to continue in the short-term at least. “With the time lag that exists between price changes in the global economy and their effect on the Australian market, I can see wholesale prices declining in the short term, so hopefully that flows on to the motorist,” says Moulis.
While it’s OPEC’s oversupply stuffing cash back into motorists’ pockets, Moulis says that it’s the USA that could provide a long-term reprieve from high petrol prices if it changes its domestic policy. It currently prohibits the sale of oil outside the USA, but by entering the global market it could put sustained pressure on global petrol prices, and help keep Australian prices in check.
Yet there’s no certainty when it comes to oil prices.
“It is too hard to predict,” warns Moulis. “If you’d asked economists last year if they thought the price of oil would fall by 50 percent, none of them would have said ‘yes’.”
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