The consumer watchdog has revealed the ideal time for motorists to fill up their petrol tanks ahead of the Christmas road trip period, indicating it’s best to hold on just that little bit longer.
The Australian Competition and Consumer Commission on Thursday recommended motorists in most of the country’s capital cities head to the bowser closer to Christmas, as the petrol price cycle moves towards its low point.
Drivers in Perth should aim for Christmas Eve as their tank top-up day, ACCC chairman Rod Sims said.
Mr Sims said after prices in Sydney, Melbourne, Brisbane and Adelaide reached the bottom of their cycle, they weren’t expected to rise again until later in the month.
For those outside of the major cities, Mr Simms advised using fuel price comparison websites and apps to hunt down the best deals.
Petrol prices are tipped to hover at the $1.30 mark for the rest of the year – a far cry from the stinging prices of October.
October saw petrol prices hit their highest in 10 years at an average of $1.59.9 in the country’s capitals. These prices dropped significantly in November, in line with falling crude oil prices.
Drivers are now paying about $18 less to fill a 70-litre tank compared with the start of October.
“Large price variations in the petrol market are very frustrating for motorists. Our advice is to keep an eye on the price cycles information to figure out the best time to buy, and use petrol websites and apps to find the cheapest petrol stations in your area,” Mr Sims said.
Drivers could also be in for a New Year bonus with a major decline in oil prices expected to continue to deliver lower petrol prices early in 2019.
Why the prices fluctuate
The benchmark Nymex oil price began the year at US$60.42 a barrel and hit highs of US$76.90 in October as petrol prices in Sydney and Melbourne soared to more than $1.67 a litre.
The steady decline since has seen the average price in the two capital cities slump as low as $1.27 a litre. Pump prices in Adelaide are also down 19.2¢ a litre and in Brisbane by 12.6¢ a litre.
Petrol prices generally are tied to Singapore wholesale prices, the closest major refining and marketing centre and a common source of imported petrol to Australia.
They generally trail Singapore prices by about a month, and industry experts say more petrol price falls are likely as the slumping price of oil flows through the supply chain.
The Singapore price has fallen by 21¢ a litre from recent highs and Australia’s wholesale petrol price has fallen by 15¢, implying a further fall of about 5 to 7¢ a litre in the new year.
The price of a barrel of oil tumbled as low as US$49.41 this week — down 35 per cent from its peak.
What lies ahead
Citibank research analysts say while the Organisation of the Petroleum Exporting Countries – 15 of the world’s largest oil producers – has promised to cut supply to support prices, an increasing number of oil projects are starting up in non-OPEC countries, including Brazil, Norway, Guyana, and Kazakhstan.
And oil production in the US is soaring, placing it as net oil exporter for the first time since tracking data began 75 years ago.
However, should crude prices remain under pressure, it points to the likelihood of lower wholesale petrol prices and potentially lower prices for drivers.
Nonetheless, not all of the oil price drop is likely to be reflected in pump prices, with petrol retailers seemingly taking an opportunity to fatten their profit margins.
Ryan Felsman, senior economist at Commsec, said that average gross retail profit margins spiked to the highest level on record last month.
“The gross retail margin rose by 10.6¢ to a record-high 24.7¢ a litre,” he said.