Economics | February 20 2017
Petrol price set to slide on stronger Aussie dollar
Petrol price
 Retail petrol: According to the Australian Institute of Petroleum, the national average Australian price of
unleaded petrol rose by 1.2 cents to 131.1 cents a litre in the week to February 19.
 In Australian dollar terms the Singapore gasoline price fell by $4.99 a barrel or 5.3 per cent to $88.73 a
barrel or 55.8 cents a litre.
 MotorMouth records the following retail prices for capital cities today: Sydney 139.8c; Melbourne 123.9c;
Brisbane 124.8c; Adelaide 142.2c; Perth 125.9c; Canberra 138.5c; Darwin 138.7c; Hobart 142.8c
The petrol figures have implications for retailers, especially petrol marketing groups.
What does it all mean?

Petrol prices may have risen last week, but it was more a function of the vagaries in the discounting cycle rather
than a significant upward lift in global oil prices. In fact motorists are set for further savings in coming weeks, with
global oil prices having recorded substantial falls. In addition the stronger Australian dollar will ensure that the fall
in global oil prices are amplified. In Australian dollar terms the Singapore unleaded price has fallen by almost $5
in the past week – all of which should feed through to domestic pump prices in a fortnight’s time.

Motorists should also keep a close watch on the petrol discounting cycle. In Sydney, petrol prices have fallen for
38 consecutive days before spiking higher late last week. In Melbourne prices have now fallen for 36 days and
are holding a few cents above the (wholesale) terminal gate price. Similar in Brisbane, prices are closer $1.24 a
litre. In Adelaide, pump prices fell for more than a month but have spiked higher a week ago and are closer to
1.43 a litre.
What do the figures show?
Petrol prices

According to the Australian Institute of Petroleum, the national average Australian price of unleaded petrol
rose by 1.2 cents to 131.1 cents a litre in the past week.
The metropolitan petrol price rose by 2.1 cents to 129.6
cents per litre while the regional price fell by 0.7 cents to
134.0 cents per litre.

Average unleaded petrol prices across states and
territories over the past week were: Sydney (up by 7.7
cents to 126.5 c/l), Melbourne (down 3.3 cents to 126.8
c/l), Brisbane (down by 4.1 cents to 127.0 c/l), Adelaide
(up by 21.1 cents to 142.7 c/l), Perth (down by 0.1 cents
to 132.8 c/l), Darwin (down by 1.7 cents to 140.5 c/l),
Canberra (unchanged at 139.7 c/l) and Hobart (down by
0.6 cents to 143.1 c/l).

The national average Australian price of diesel petrol
was unchanged at 130.8 cents per litre in the week to
February 19. The metropolitan price rose by 0.1 cents to
Savanth Sebastian, Senior Economist, CommSec
Twitter: @CommSec
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Economic Insights Petrol price set to slide on stronger Aussie dollar
131.1 c/l, while the regional average price rose by 0.1 cents
to 130.7 c/l.

The national average wholesale (terminal gate)
unleaded petrol price stands at 119.20 cents a litre, up by
0.6 cents a litre over the week. The terminal gate diesel
price stands at 115.3 cents a litre, unchanged over the
previous week.

Last week the key Singapore gasoline price fell by
US$3.25 or 4.5 per cent to US$68.40 a barrel. In Australian
dollar terms the Singapore gasoline price fell by $4.99 a
barrel or 5.3 per cent to $88.73 a barrel or 55.8 cents a
litre.

MotorMouth records the following retail prices for
capital cities today: Sydney 139.8c; Melbourne 123.9c;
Brisbane 124.8c; Adelaide 142.2c; Perth 125.9c; Canberra
138.5c; Darwin 138.7c; Hobart 142.8c.
What is the importance of the economic data?

Weekly figures on petrol prices are compiled by ORIMA Research on behalf of the Australian Institute of
Petroleum (AIP). National average retail prices are calculated as the weighted average of each State/Territory's
metropolitan and non-metropolitan retail petrol prices, with the weights based on the number of registered petrol
vehicles in each of these regions. AIP data for retail petrol prices is based on available market data supplied by
MotorMouth.
What are the implications for interest rates and investors?

The Reserve Bank is optimistic about the medium term prospects for the Australian economy. However a lift in
non-mining business investment would provide policymakers with an added degree of comfort. Interest rates are
on hold for the foreseeable future.
Savanth Sebastian, Senior Economist, CommSec
Twitter: @CommSec
February 20 2017
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