Fuel prices in Australia are at record highs on lingering fears of a war between Russia and Ukraine, with some parts of the country reporting prices well above $2 a litre.
Petrol price app Motor Mouth reports an average petrol price in Brisbane of 191.6 cents per litre, although a petrol station in Morayfield was selling fuel at 217 cents per liter on Tuesday.
Similar prices are seen in Perth, while despite increased competition between outlets in the major capitals of Sydney and Melbourne, prices as high as 189 cents per liter have been seen outside some service stations.
The current average price in Sydney is 177 cents per litre.
Fears of a northern European conflict between Russia and Ukraine are causing Australian average oil prices to rise sharply. Pictured: Russian soldiers train at the Obuz-Lesnovsky training ground
Russia is the world’s second-largest oil producer, producing 9.8 million barrels a day, meaning a war with Ukraine could lead to a sharp contraction in supply. Pictured: Members of the Ukrainian Border Guard patrol along the Ukrainian border
Mark McKenzie, CEO of industry-leading body Australasian Convenience and Petroleum Marketers Association, said “rare factors” were currently influencing oil prices in Australia
Mark McKenzie, CEO of the cutting-edge Australasian Convenience and Petroleum Marketers Association (ACAPMA), told Daily Mail Australia that retailers had factored in the possibility of tight supplies if the situation between Russia and Ukraine was deteriorating.
“I can’t remember a time in 50 or 60 years of market operation after the war when we had such uncertainty,” McKenzie said.
Russia is the world’s second largest oil producer, producing 9.8 million barrels per day.
“If you had a conflict between Russia and Ukraine, that potentially means the economy is distracted and oil may not flow,” McKenzie said.
“It’s such a large volume that unless demand drops, which it won’t, you’ll have a significant challenge in terms of supply availability.”
Sydney’s average petrol price chart reveals a current average price of 177 cents per litre, but some suburbs have seen prices as high as 189c
The rise in average petrol prices in Brisbane since the start of this year, from around 150c per liter on December 31 to almost 190c per liter in mid-February
Mr McKenzie said ‘rare factors’ were currently influencing petrol prices in Australia.
From April 2020 to October 2021, wholesale fuel prices increased by 96% as countries began to recover from the sudden drop in demand caused by the Covid pandemic.
Since January 1, fears of a war between Russia and Ukraine have driven the wholesale price up another 17%, Mr McKenzie said, driving Australia’s current record high prices to the bowser .
If a European war were to break out, Mr McKenzie said it was unclear how prices and supply in Australia would be affected.
“We operate in a global fuel market that is totally unknown to us. We are emerging from two years of a pandemic, which has already driven up our prices, and now we see a significant risk of conflict in Europe involving the second largest oil producer.
If the situation between Russia and Ukraine is resolved diplomatically, Mr McKenzie said he would expect fuel prices to eventually return to the capital’s normal 4-5 week price cycle at which Australians got used to, in which the discount is followed by a price increase.
“If you were to isolate the [price rise] effect of the last eight weeks, it is almost entirely attributable to the risk of conflict.
Mark McKenzie, CEO of industry-leading body Australasian Convenience and Petroleum Marketers Association
“The counterfactual is that if this risk disappears, the market will price in lower risk.
“It’s a global market decision, so once that happens it takes about two weeks to reach the wholesale price we pay in Australia.”
Australia’s exchange rate, with the Australian dollar currently worth around 71 US cents, is increasing fuel retailer spending to maintain supply.
The December Consumer Price Index released by the Australian Bureau of Statistics found that rising fuel prices are one of the explanations for Australia’s rising inflation, with an increase of 6.6% fuel during the quarter and a 3.5% increase in the cost of a typical basket of goods. .
The inflationary danger is that higher fuel prices are usually passed on to consumers in the form of higher prices for goods and services by manufacturers and retailers.
“The Cold War is back,” Independent MP Bob Katter told Sky News on Tuesday. “They are not communists anymore, they are imperialists, naked imperialists, one wants Ukraine and the other [China] wants Taiwan.
“We don’t have gasoline, we have two or three days’ supply,” he said. “The government’s response to this, for which they will always be laughed and ashamed, is to put tankers in the United States.”
Mr Katter was referring to Australia’s announcement in March 2020 to lease space in the US Strategic Petroleum Reserve (SPR) to store and access Australian-owned oil during a global emergency.
Mr. Katter noted that world wars had previously broken out over oil disputes.
There are also fears that a potential conflict between Russia and Ukraine could push world wheat prices up by 50%.
There are also fears that a potential conflict between Russia and Ukraine could push up world wheat prices by 50%
The two countries account for around a third of the grains and oilseeds traded globally, meaning any disruption to shipping caused by conflict and sanctions would impact the market, including in Australia.
Matthew Madden, a cereal farmer from NSW, said that while farmers were watching the situation in Ukraine closely, it would not necessarily affect his own plans for sewing crops.
“From a personal perspective, I don’t want the war to drive up prices,” Madden said.
“You might have a sugar hit, but it doesn’t end well.”
Australian capitals – average petrol prices
Unleaded price per liter as of February 14:
Adelaide – 163.7c (147c on January 12)
Brisbane – 189.3c (151c on Dec 31)
Canberra – 178.4c (166.1c on Jan 2)
Hobart – 186.1c (178.4c on Jan 2)
Melbourne – 177.8c (152c on Dec 31)
Perth – 181.6c (150c on Jan 12)
Sydney – 177c (156c on 31 Dec)