Oil may have dropped by 20 per cent over the past month, but motorists in Melbourne are being hit with some of the highest prices in the country.
The price of crude oil has dropped by around 10 per cent in the past day to its lowest level in months, but Australian households could still be hit with higher fuel prices.
WTI crude dipped below $US98/barrel between Tuesday and Wednesday – representing a decline of 20 per cent off its highs in early June – but despite the easing oil prices, unleaded jumped by 20 per cent across Melbourne over the weekend to $AU2.39/litre, where it remains.
Melbourne drivers are bearing the brunt of the price gouging, according to petrolspy.com.au, with unleaded prices sitting between $2.05/L and $2.25/L in all other capital cities across the country.
Not all fuel stations in Melbourne have cranked up their prices during these school holidays, with a handful remaining below $1.99/L at the time of writing – suggesting motorists should do their research before refuelling, with a 40c/L discount adding up to more than $20 during a fill-up.
But prices could be headed higher, with Prime Minister Anthony Albanese confirming the fuel excise cut – introduced by the former government for a period of six months to help provide household cost-of-living relief – won’t be continued when it expires on 28 September 2022.
“The former government put in place a time-limited change to the petrol payments,” Mr Albanese told media on Wednesday morning.
“Before the election, both sides said they had no plans to increase that further into the future.
“And that’s the circumstances we have to deal with. We can’t do everything we would like to do.”
While the Deputy Prime Minister had previously said the 22.1c/L excise wouldn’t continue, the PM yesterday cited the Federal Government’s $1 trillion debt as the reason behind the decision.
The General Secretary of the Organization of the Petroleum Exporting Countries (OPEC), Mohammad Barkindo, told a conference earlier this week the oil industry is “facing huge challenges along multiple fronts,” according to oilprice.com.
“The ongoing war in Ukraine, a COVID-19 pandemic which is still with us, and the inflationary pressures across the globe have come together in a perfect storm that is causing significant volatility and uncertainty in the commodity markets in general. More importantly, in the world of energy,” he said.
Financial analysts are divided on where oil prices go from here, with JPMorgan warning it could reach $US380/barrel in a worst case scenario, while a recent report from Citibank (via Bloomberg) suggested it could drop to $US65/barrel by the end of this year due to possible recession risks in key markets.
Ben Zachariah is an experienced writer and motoring journalist from Melbourne, having worked in the automotive industry for more than 15 years. Ben was previously an interstate truck driver and completed his MBA in Finance in early 2021. He is considered an expert in the area of classic car investment.