7 December 2023

Fuel price relief arrives ahead of Christmas holidays (finally)

| James Coleman
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The average price for regular unleaded petrol (91) in Canberra on 5 December was $1.90. Photo: James Coleman.

After what seems an eternity, filling up at the pump is becoming less painful, and with Christmas fast approaching, it couldn’t come at a better time.

In early October, regular unleaded 91 in Canberra ranged in price from $1.95 per litre to $2.16, at an average of $2.09.

Today (5 December), two months on, the cheapest can be found in Fyshwick at $1.84 and the most expensive in Belconnen at $1.99. The average is $1.91.

You’ll be feeling the 11-cent difference. For a 50-litre tank, that’s $5-plus in your pocket.

Mark McKenzie from the Australasian Convenience and Petroleum Marketers Association (ACAPMA) says prices have been falling since early November when the global oil market realised the conflict in the Middle East was not going to “bring the sky falling in”.

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They’re now more nervous about what the new year may bring.

“Basically, oil markets have been concerned about next year and the fact the global economies are cooling,” Mark explains.

“[Producers are] anticipating a slowing [market] and are trying to keep their volume up by putting their prices down.”

Just in the past week, prices have also been helped by an incremental creep in the value of the Australian dollar, now worth 0.66 USD.

“Because we buy oil in US dollars, when the Australian dollar is worth more, the price obviously comes down a little bit.”

Prices are expected to return to the levels they were in October last year. Photo: James Coleman.

The end result might not be so much the price falling through the floor, “but it’s certainly not escalating the way many suggested it was going to”.

Mark admits he would be working in stock trading rather than the petrol industry if crystal balls were an option, but he expects levels to return to what they were before October’s spike.

“Prices have been pretty steady from October 2022 through to July 2023, and I expect they’re going to revert back to that level,” he says.

“We’re certainly not going to see it drop down to where it was pre-COVID, but – on balance – we’re seeing downward forces overpower upward price pressures and that’s why we’ve seen some moderation in price.”

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Beyond the ACT, the situation is more hit and miss.

An hour away in Goulburn, prices for regular unleaded petrol range from $1.85 to $2.19, while Wagga Wagga is a good deal cheaper, between $1.71 and $1.94.

Mark says the lower prices are a sign the service stations in those areas are “doing it a bit tough”.

“In a place like Canberra, we’ve got a situation where the market is pretty constant, with a population that tends to stay within its territory … but people aren’t travelling as much now because of the costs of living at the moment, so businesses are doing what they can in terms of pricing to get people to come in their store.”

He compares it to a “flash sale”.

“People tend to forget service stations are retail businesses, so whatever they can do to get more people into the stores and buying other non-fuel goods, they’ll do.”

Original Article published by James Coleman on Riotact.

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