Petrol prices hit new high

The rise in petrol prices across Australia has continued unabated this month, with the national average price hitting a new record of 158.4 cents per litre.

The price of unleaded petrol jumped an average 2.1 cents per litre last week, with record highs recorded in all states.

The average price in Western Australia was fractionally above the national figure at 159c/L.

This masked a substantial variation between the average Perth price of 156.8c/L, which was lower than most capital cities, and the average regional price of 166.4c/L, which was higher than all other states and territories except the Northern Territory.

CommSec Economics said the average Australian household was now spending almost $222 a month on petrol, up almost $52 over the past eight months.

It said this was equal to a quarter per cent interest rate hike on a $230,000 mortgage. Reserve Bank Governor Glen Stevens noted last week that the higher oil price is effectively acting like a further rate hike, curtailing consumer spending and slowing economic growth.

CommSec said the rising oil price is likely to impact on the profitability of firms by adding to the cost base.

However, it has found that retailers and airlines are already passing on the increased costs to consumers, rather than absorbing it into their profit margins, adding to the inflation numbers.

The only good news for motorists is that the Australian dollar remains in strong demand, helping to absorb some of the pain being felt at petrol pumps across the nation, CommSec said.

The recent earthquake in China has served to increase demand for gasoline. CommSec said that last month China became a net importer of gasoline for the first time on record.

Despite Asian fuel prices having fallen in the latest week, CommSec believes petrol prices have the potential to rise further over the coming weeks.

The national average price is likely to hit 160c/L, with prices likely to lift as high as 175c/L in the next fortnight.