Aussie drivers warned to ‘fill up now’ with petrol prices forecast to skyrocket

Motorists have a small window to refuel cheaply, as many cities start their first new petrol cycle after the fuel tax is reintroduced.

Some retailers are charging more than $2.10 per liter in major capitals, but others have yet to raise prices, Compare the Market data shows.

Costs can soar by as much as 40 cents a liter in a week, potentially skyrocketing to $2.14 a liter in major eastern cities.

The rise in fuel prices follows the return of the excise tax after it was temporarily halved as a measure to ease the cost of living when the war in Ukraine caused fuel prices to skyrocket earlier in the year.

So far, the full tax rate refund hasn’t turned up at the pump, but Compare the Market energy expert Chris Ford said the start of a new fuel cycle means prices will now rise.

He said new fuel price cycles started in Sydney and Brisbane on Friday.

“We know that fuel prices fluctuate in regular cycles and commuters will see the biggest difference between the cheapest and the most expensive at the beginning of the cycle, when prices are rising,” said Mr. Ford.

There is now a 50 cent gap between the cheapest and most expensive fuel in Sydney, Melbourne, Brisbane and Adelaide.

On a weekly average, fuel prices rose just a modest 1.4 cents last week, according to the Australian Institute of Petroleum fuel report.

The weekly average was probably dragged down by the low prices at the start of the week.

Mr Ford said retailers in most cities only started raising prices over the weekend.

But the average diesel price has risen to near record highs, with the national average rising 11.2 cents last week to $2.33 a liter.

Wholesale fuel prices have remained fairly stable, but the decision by the Organization of the Petroleum Exporting Countries to cut production is keeping gasoline prices under pressure.

Fuel prices rocketed earlier this year due to problems in the fuel supply chain caused by the COVID pandemic, the war in Ukraine and supply shortages, but it is OPEC’s latest decision to cut oil production that will now keep prices high. said Mr Ford.

CommSec economist Craig James said fears of a global recession were simultaneously putting downward pressure on prices.

“Also, the zero-COVID policy in China continues to limit the economy and thus the demand for oil,” he said.

Higher costs for fuel, labor and raw materials also led to a contraction in Australian business activity in October, as measured by S&P Global’s Purchasing Managers Index.

Both manufacturing and services PMIs fell below 50 for the first time since January, pointing to a contraction.

Overall business confidence, meanwhile, continued to decline in October to its weakest since the peak of the COVID pandemic in April 2020, which is not a positive sign for the Australian economy, said S&P Global economists.

Australia’s longer-term growth prospects have also been revised downwards, although Treasury has raised its 2022/23 growth forecast by a quarter of a percentage point from forecasts made in July.

It comes as internal RBA research says real estate prices could fall by as much as 20 percent by the end of 2024, amid higher interest rates and a slowing economy.

The slowdown in the country’s domestic growth is expected to worsen in 2023/24, with Treasury slashing its growth forecast by half a percentage point from its July projections.