Petrol prices in Western Australia and around the nation hit record highs last week and further increases are widely anticipated.
Petrol prices in Western Australia and around the nation hit record highs last week and further increases are widely anticipated.
The national average petrol price rose by 3.3 cents per litre – the biggest weekly rise in almost five months – to a record $1.47 per litre last week.
At this level, the average household will spend almost $206 a month on petrol, up $30 over the past six months.
This is equivalent to a quarter per cent interest rate hike on a $180,000 mortgage, according to estimates by CommSec economists.
The average petrol price in metropolitan areas has increased to 146.1c/L while the regional average price is 148.8c/L.
In WA, the state average is 147.7c/L. Perth’s average price was slightly below the national figure at 145.9c/L while the average price in regional WA was much higher than the national figure, at 154.4c/L.
The cheapest city for petrol was Brisbane, where the average price was 139.6c/L.
CommSec said the only good news for motorists was that the Australian dollar was holding at lofty levels, absorbing some of the pain being felt at petrol pumps across the nation.
Over the past month, Australian petrol prices have risen by 4 per cent while the Australian dollar cost of Singapore unleaded petrol has soared by more than 11 per cent.
“Unfortunately oil companies can only hold back for so long in passing through higher fuel costs to motorists,” CommSec said in a research note.
“The national average price is on track to hit $1.50 a litre, with prices likely to lift as high as $1.60 a litre in the next fortnight.”
CommSec said the soaring cost of petrol would cause people to make some hard choices about their spending. It may lead to cuts in discretionary spending, and may also prompt more scrutiny about the choice of motor vehicle, with smaller, more fuel-efficient models favoured.
Higher world fuel prices have also started to affect the cost of air travel.
This week, Qantas increased domestic airfares by 3.5 per cent and international fares by 3 per cent.
“The bad news won’t end there either,” CommSec said.
“Higher freight costs will be translated into price hikes for a broad range of goods, further complicating the inflation battle being waged by the Reserve Bank.”
CommSec suggested that higher petrol prices, together with further hikes in rates by banks, could cause the Reserve Bank to hold off on lifting official interest rates again next month.
The combination of higher fuel, food and housing costs represents a triple whammy to the average family.
Weekly figures on petrol prices are compiled by ORIMA Research on behalf of the Australian Institute of Petroleum.
The national average is calculated as the weighted average of each state/territory’s capital city prices weighted by fuel volume consumed in each state/territory.
