Petrol prices rising again

The AA is warning petrol prices risk topping $4 a litre this year following recent increases at the pump as the conflict between Russia and Ukraine continues and crude oil prices rise.

The cost of 91 octane petrol is edging back towards the $3 mark, which led to the government in mid-March cutting fuel excise duties by 25c a litre for three months. Road user charges have also been temporarily reduced for diesel.

At the weekend, a litre of unleaded 91 octane petrol cost an average of $2.78, according to fuel app Gaspy, a 15c increase over the previous 28 days.

Over the same period, unleaded 95 was up 19c to $2.96 and unleaded 98 was at $3.13, up 22c. Diesel had increased 27c to $2.52, reports Stuff.

Terry Collins, AA’s principal adviser for motoring policy, says the industry has been hit by a perfect storm driven by EU sanctions on Russian oil, high international margins and increased demand as Covid restrictions ease worldwide.

He adds he doesn’t expect the price of fuel to go down any time soon. 
“I see this $3 mark being here for quite some time now, I think it could almost be the new normal,” says Collins, pictured.

“It’s going to be a real problem for our government when this three months [of tax relief] ends.”

Brent crude, used as an international benchmark, was trading above US$100 a barrel and Collins believes it will stay above that level for the rest of the year.

He warns it is possible petrol at the pumps may hit $4 a litre this year as a result of global uncertainty .

“I wouldn’t bet it wouldn’t happen … because it really does come down to how severely these sanctions occur against the Russians and how long does conflict last, and the extent [Russia and Ukraine] want to do mutually assured destruction of each other’s infrastructure around petroleum and fuel.”