Higher petrol prices in Australia’s largest capital cities in March 2021 quarter, has occurred due to cuts in oil production by the OPEC cartel and other big producers.
This is in combination with a pick-up in global fuel demand.
The average retail price for petrol across Sydney, Melbourne, Brisbane, Adelaide and Perth was 133.4 cents per litre (cpl). This is an increase of 12.0 cpl from the December quarter 2020.
“What we are experiencing in Australia is a flow-on effect of higher international crude oil and refined petrol prices,” says ACCC Chair, Rod Sims.
Over the last 40 years, international crude oil prices in inflation-adjusted terms were on average around USD 61 per barrel. In March 2021 monthly average crude oil prices were above this long-term average for the first time since December 2019.
Mr Sims continues, “The OPEC cartel controls a huge amount of global oil supply. Its agreements to restrict supply means higher crude oil prices which largely influence refined petrol prices.
“The higher price of Mogas 95, the benchmark of refined regular unleaded petrol in the Asia-Pacific region, means we are paying more for petrol at the bowser.”
Demand for petrol below pre-pandemic levels
The March quarter 2021 shows that demand for petrol remains below pre-pandemic levels.
“In the second half of 2020 national petrol sales partially recovered when some Covid-19 restrictions were eased,” says Mr Sims.
Gross retail margins fell
Average gross indicative retail differences in the five largest cities fell slightly for the second consecutive quarter, however they still remain relatively high. In the march quarter, they were 15.8 cpl, a decrease of 1.6 cpl from the previous quarter.
“There are some fixed costs involved in petrol retailing and businesses may have been setting retail prices higher than they otherwise would to offset lower sales volumes.”
View the full ACCC latest petrol monitoring report here.
