Australians concerned about recent high petrol prices might soon be in for some relief, with oil prices tumbling overnight on Wall Street and OPEC nations stepping up production to meet demand.
Petrol prices took off in September with the threat of more sanctions against Iran jacking up the crude oil price. The falling Australian dollar only added to the pain at the bowser.
West Texas Intermediate traded at $US66.04 a barrel on Tuesday, slipping below its 200-day moving average for the first time in a year.
With Saudi Arabia under pressure in the International community over the murder of journalist Jamal Khashoggi, the country’s Energy Minister, Khalid Al-Falih, has indicated it would step up to meet any supply shortfall caused by sanctions on Iran.
Mr Al-Falih told Bloomberg that OPEC and its allies were in “produce as much as you can mode” – a move that would ease pressure on prices across the board.
Oilprice.com reported on Wednesday that, with markets becoming cautious about risk, the move towards $US100 a barrel now looked unlikely.
“The latest withdrawal of speculators and the negative price response since yesterday indicate that the market is not nearly as nervous as it was just a few weeks ago,” they said in a Commerzbank note.
“One role in this is doubtless played by the fact that the oil market looks set to ease noticeably in 2019.”
As petrol prices of more than $1.65 a litre continue in many parts of Australia, more than 160,000 motorists have indicated they would either join or are interested in taking part in a national fuel strike.
The ABC has reported that an online petition lobbying the federal government to ditch some taxes on fuel has gained traction. Organiser Sabrina Lamont said she thought petrol prices should be much lower.
“A fair price should be $1.15 if you do the calculation on a barrel price and compare the dollar price, and then take away the excise and GST. That is roughly what the price should be at,” she told the ABC.
Australasian Convenience and Petroleum Marketers Association chief executive Mark McKenzie said $1.15 a litre was far from fair.
“It would result in fuel retailers losing an average of 40 cents per litre, given that they were buying petrol at an average of $1.45 last week and it costs an average of 10 cents per litre to retail [including] rent, wages and electricity.
“So a break-even cost with no profit would have been a sale price of $1.55.”
Mr McKenzie said the increase in the cost of fuel in the past year was due to a 44 per cent increase in crude oil, a 12 per cent devaluation in the Australian dollar and a small increase in fuel retailing costs.
Around 45 per cent of the cost of fuel relates to overseas factors such as the cost of crude oil and the international refining price while a further 45 per cent is Australian government taxes.”
Mr McKenzie said a strike made “no sense”.
“Punishing Australian fuel retailers, most of whom are small family businesses, for increases that are the responsibility of international companies makes no sense whatsoever,” he said.
RACQ spokeswoman Lucinda Ross also told the ABC a one-day strike would not work, even if it happened nationally.
“We have run the figures and about 250,000 Queenslanders fill up each day,” she said.
“You can understand the frustration level is at an all-time high, with prices reaching the most expensive we have ever seen.
“But boycotting for one day of the year won’t do anything to lower the price of fuel.”