One market analyst suggests that it might be time to reconsider the idea of “cheap” petrol. Wholesale fuel prices have been steadily increasing, leading to higher retail pump prices for motorists. According to commodities expert David Scutt, wholesale petrol prices in Singapore, where Australia sources the majority of its refined fuels, have risen by over 30 percent in Australian Dollar terms since July 2023.
Despite the significant increase in retail pump prices in recent months, there is no sign of relief for motorists. Mr. Scutt believes that the bottom of the fuel price cycle will be around $2 per liter for 91 octane, considering the rising wholesale costs.
The Australian Automotive Association reports that households spend an average of nearly $415 each week on transportation costs, equating to about 16 percent of their household income. These costs include fuel, car loan repayments, tolls, public transport, insurance, servicing, tires, registration and licensing, and roadside assistance.
Transport costs vary across different cities in Australia, with Sydney residents spending the most at over $510 per week, followed by Melbourne and Brisbane residents who spend over $500 per week.
As petrol prices continue to climb, it becomes crucial for motorists to carefully manage their transportation expenses. Understanding the contributing factors to wholesale fuel prices can help individuals make informed decisions regarding their fuel consumption and budgeting.
Considering the expert analysis and the increasing expenses associated with transportation, it is essential for motorists to plan their finances accordingly to adapt to the changing fuel price landscape.
Sources:
– David Scutt, commodities expert
– Australian Automotive Association
– Ben Zachariah, motoring journalist and expert in the area of classic car investment