If you own a car chances are you’ve been avoiding driving it lately because you don’t want to fill up the tank. You’re not imagining it — the petrol prices in Australia are at a record high.
Some petrol stations are charging upwards of $2 per litre, while the national average price for unleaded hit a record 176.9 cents a litre earlier this week, as reported by the ABC.
No surprises here: good old Sydney was noted to have the most expensive fuel in the country earlier this week at 199.9 cents per litre for standard unleaded.
Average petrol prices also broke records in Canberra at 177.3 c/l, Perth at 181 c/l, Melbourne at 182.3 c/l, Hobart at 185.2 c/l and Brisbane at a whopping 191.5 c/l.
So whyyyyy is this happening?
Basically it’s all to do with the unfolding Ukraine-Russia situation.
The threat of a Russian invasion into Ukraine and retaliation from the United States and other NATO allies has been building, and has some worried that Russia’s massive oil production could stop. This has sent crude oil prices globally to a seven-year high.
Hate to say it but this is one example of why you should care about international politics.
But the seven-year crude oil high doesn’t explain why Australian petrol prices are at an all-time high.
While crude oil isn’t quite close to breaking its price record, the Australian dollar is much weaker than it was the last time oil was this expensive.
Seven years ago oil cost $100USD a barrel, but the Aus dollar was really strong then — around 90 US cents.
Now oil is $95USD a barrel but one Australian dollarydoo only buys 71 US cents.
The cost of refining the oil into fuel in Singapore is also at its highest level since July 2008. And when we factor in shipping and taxes, turns out your local service station has to fork out a record 167.1 cents a litre to buy the fuel. They obviously have to make some sort of profit, so they add on a few more cents.
We’re also spending a record amount on petrol, with a national average of nearly $250 per week according to CommSec. This indicates people are still driving around as much if not more than ever.
The problem here is it causes a flow-on effect and makes other goods and services pricier.
For example, a restaurant may charge more for their delivery service because it costs them more to drive to you.
All of this has added up to a higher overall cost of living in Australian rn.
The Australian Bureau of Statistics December Consumer Price Index showed a 3.5 per cent rise in the cost of a typical basket of goods that the ABS uses to measure the rising cost of living.
Petrol prices rose 6.6 per cent in the last quarter of 2021, which was attributed as a major factor in the rising cost of living.
With the Ukraine crisis yet to deescalate, we don’t know when petrol prices could start to drop again.
Time to ride your bike.