Australian motorists are unlikely to see relief from sky-high petrol prices any time soon, with the latest bowser squeeze threatening to throw a spanner in the works for the Reserve Bank ahead of inflation data this week.

Macquarie University senior lecturer Lurion De Mello said high global oil prices and a weakened Australian dollar are squeezing Australians.

That risks putting upwards pressure on inflation at a time when central bankers want to see price growth easing.

“My biggest worry is the price of diesel,” he said.

“It’s gone up quite significantly since July and that’s going to have a huge bearing on transport costs, which can add to inflation for food items.”

Official inflation figures for the September quarter will be published on Wednesday and will be pivotal to Reserve Bank decision making about whether to raise interest rates again in 2023.

Treasurer Jim Chalmers said on Sunday that higher petrol prices will affect inflation data.

“We expect in next week’s inflation figures that we will see some of the first part of that – elevated global oil prices – reflected in the CPI [Consumer Price Index],” Chalmers said.

“Obviously conflict in the Middle East introduces an element of uncertainty in the global economy because it runs the risk of putting upward pressure on oil prices.”

Economists still think the prospect of an interest rate hike in November is unlikely though, expecting central bankers to look through higher headline inflation and instead focus on the underlying (trimmed mean) figure that will cut out the effects of volatile and rising oil prices.

Big rise from July

Figures published on Monday showed the national average petrol price was 198.4 cents per litre (cpl) last week, which is up almost 17 per cent on prices in early July.

Diesel prices – a key cost for businesses in the transport of consumer goods like groceries – have risen to 221 cpl over the past week, an increase of 33 per cent on prices in early July.

Unleaded prices were lower on Monday than a few weeks ago because east coast market cycles have begun to fall, but the relief is relatively muted.

MotorMouth figures show that average petrol prices are 192 cpl in Melbourne, 186 cpl in Sydney and 203.3 cpl in Brisbane.

That’s better than more than 210 cpl two weeks ago, but it won’t be long before prices start going up again.

In other words, even savvy motorists who wait to purchase petrol at its cheapest levels are paying almost $2 a litre in major capitals these days, and much more when prices are peaking.

Source: MotorMouth (click to enlarge).

De Mello said high petrol prices will likely persist for the remainder of 2023 on the back of elevated global oil prices, with key oil-producing nations in OPEC+ having signalled an intention to keep supply tight.

A lower dollar isn’t helping

The Australian dollar isn’t expected to strengthen significantly against the US dollar. It is down to 63 US cents, and is 10 US cents lower than in January.

“It’s the signalling effect from OPEC+ that they are going to keep production under control – that adds a fair bit of fear that supplies are going to be low,” De Mello said.

“The Australian dollar is still very low and is expected to go down even further.”

It is likely nearing the best time to fill up for motorists in major capitals, with prices only likely to rise again and the prospect that the next trough in the market will be higher still.

De Mello said Australians who search out independent petrol stations will likely find the cheapest prices.

That’s because Australian Competition and Consumer Commission research has shown independents are the last to raise prices when the market starts heading up again.