Petrol prices are predicted to hit $1.30 a litre over the Christmas holiday season due to a global oil price surge, according to economists.
NAB analysts have forecast that petrol prices will surge over summer and remain high well into 2018.
“The September quarter saw petrol average 123.3 cents/L, but we see petrol in the December quarter around 3.9 per cent higher at 128.1 cents/L,” a NAB report read.
“Our forecasts point to petrol being above 130 cents/L for most of 2018.”
Melbourne University’s Dr David Byrne, a senior lecturer in economics, said the petrol price spike will coincide with a period where the Organisation of the Petroleum Exporting Countries (OPEC) is to cut back global oil supply.
This in turn pushes up crude oil prices, which eventually leads to higher prices at the pump, he said.
“OPEC is cutting back supply to battle a world oil supply glut that has caused oil prices to be low in recent years due to a fall in oil demand with the rise of alternative energies, like gas and electric cars,” Dr Byrne said.
“They seem to be taking steps to cut supply to recover profit margins, and everyone around the world pays for it.
“It corresponds to the holiday season, which is a high-demand season due to car driving, shipping, flights and so on.”
Dr Byrne told The New Daily that, for example, a rise to $1.30 per litre from $1.10 per litre, means that for a Toyota Corolla driver with a 70L fuel tank, it will cost an additional $14 each time they fill up.
“Based on historical OPEC supply cuts, we can probably expect higher price levels at least for the next four to six months.” he said.
How to avoid expensive petrol prices
Australian Competition and Consumer Commission chairman Rod Sims advised motorists to check its price cycle advice and use fuel price transparency apps or websites to find the most competitive fuel price in their area.
The consumer watchdog’s September quarterly report on the Australian petroleum industry revealed that drivers could be saving millions of dollars collectively on petrol costs by avoiding filling up at the peak of the cycle.
“Motorists who fill up less frequently, however, and therefore only buy petrol when prices are falling, can save much more,” Mr Sims said in a statement on Monday.
“For example, avoiding buying petrol on the 10 days around the price cycle peaks would see motorists save 3.8–6.1 cents/L in the capital cities.”
The Sydney and Melbourne petrol price cycles (cpl = cents/L)
This would see annual savings of $141 million in Sydney, $124 million in Melbourne, $68 million in Brisbane and $55 million in Adelaide, he said.
“There can be significant price differences between sites at different points in the price cycle, so motorists that shop around can save themselves a lot of money.”
Dr Byrne also noted that independent retailers typically sell petrol at a discount, while major brands such as BP, Caltex, Coles and Woolworths tend to charge a premium.