Daily petrol prices on a seven-day rolling average basis in Sydney, Melbourne, Brisbane, Adelaide and Perth increased to 172.4 cents per litre (cpl) at the end of October 2021, the ACCC’s latest petrol monitoring report shows. In real terms, these are the highest prices in seven years.
The ACCC’s report looks at the September quarter but provides additional data and analysis to November, as there were significant increases in international refined petrol prices and Australian retail prices after September.
“International refined petrol prices and the Australian to US dollar exchange rate largely determine movements in the retail price of petrol in Australia,” says ACCC Chair Rod Sims.
“As refined petrol is made from crude oil, movements in the global crude oil price drive the international price of refined petrol.”
In October, the key international petrol benchmark for Australia (Mogas 95), hit 83.7 cpl. In real terms, this was the highest monthly average in seven years.
The report shows that Australian petrol prices have been increasing since November 2020. This was after reaching record lows in April 2020 following the initial impact of Covid-19.
In November 2021, motorists in the five largest cities on average were paying around 48.0 cpl more for petrol than they were a year ago.
“Many people are rightly upset about the pressure that the current high petrol prices are putting on their household budget,” says Mr Sims.
“It is important to understand that this is predominately due to higher international prices and the actions of the OPEC cartel.”
According to the ACCC, OPEC and other crude oil producing countries, including Russia, have only marginally increased supply since agreeing on major production cuts in the middle of last year. As a result, weekly average crude oil prices more than doubled from about US$38 per barrel in early November 2020, to about US$85 per barrel at the end of October 2021.
International demand for crude oil increased in the September quarter 2021 as more economies started opening up after Covid-19 restrictions, says the ACCC, and parts of Europe and Asia affected by the Northern Hemisphere energy crisis turned to crude oil as an alternative to gas and coal.
“The OPEC cartel’s restriction of oil production is ultimately causing Australian motorists to pay very high prices for petrol at the moment,” says Mr Sims.
“We will continue to keep a very close eye on the petrol market, and now that the international refined petrol price has started falling, we expect to see retail prices here do the same.”
