Why high petrol prices could stay well above $2 a litre for another 18 MONTHS


Why high petrol prices could stay well above $2 a litre for another 18 MONTHS

  • Commonwealth Bank energy economist Vivek Dhar predicts prices staying high
  • He said Russia’s Ukraine invasion would restrict the global supply of crude oil
  • Every Australian capital city now has average unleaded prices above $2 a litre
  • Treasurer Jim Chalmers has ruled out extending six-month fuel excise halving  

Australians could be paying more than $2 a litre for petrol for another 18 months as Russia‘s war against Ukraine drags on, a major bank fears.

Vivek Dhar, the Commonwealth Bank’s energy economist, said the worsening conflict would have flow-on effects for Australian motorists as global crude oil supply remained tight.

‘Diesel and petrol prices are likely to remain elevated over the next 12 to 18 months,’ he said. 

‘Prices will remain above pre-Ukraine war levels because of the challenges replacing Russian supply.’

Australians could be paying more than $2 a litre for petrol for another 18 months as Russia's war against Ukraine drags on, a major bank fears (pictured is a Perth BP service station)

Australians could be paying more than $2 a litre for petrol for another 18 months as Russia’s war against Ukraine drags on, a major bank fears (pictured is a Perth BP service station)

Every capital city this week had average unleaded petrol prices above $2 a litre.

Adelaide had the dearest average price of 234.4 cents a litre which was a record high, followed by Canberra (222 cents a litre), Hobart (218.8 cents a litre), Melbourne (217.9 cents a litre), Darwin (209.8 cents a litre), Sydney (207.9 cents a litre) and Perth (207.1 cents a litre), MotorMouth data showed. 

Prices are remaining high despite former treasurer Josh Frydenberg in the March budget halving fuel excise for six months at 22.1 cents a litre.

New Treasurer Jim Chalmers has ruled out extending the excise halving beyond the end of September, despite Australia having high inflation and a cost of living crisis, citing the $3billion cost of the relief measure.

‘To extend it indefinitely would cost the budget a lot of money and we have to weigh all of these things up responsibly,’ he told ABC Radio National presenter Hamish Macdonald.

‘We have to weigh up our priorities, and you can’t do everything that you would like to do when you’ve got a budget which is heaving with a trillion dollars of debt.’

Australian Institute of Petroleum data showed the national average unleaded petrol price fell by 0.8 cents last week to a still high 211.1 cents a litre.

New Treasurer Jim Chalmers (pictured with Prime Minister Anthony Albanese) has ruled out extending the excise halving beyond the end of September, despite Australia having high inflation and a cost of living crisis, citing the $3billion cost of the relief measure

New Treasurer Jim Chalmers (pictured with Prime Minister Anthony Albanese) has ruled out extending the excise halving beyond the end of September, despite Australia having high inflation and a cost of living crisis, citing the $3billion cost of the relief measure

CommSec calculated an average family now spent $295.54 a month filling up the car with petrol – just below the recent record high of $297.50 a month. 

That has risen by an extra $73.78 a month compared with the start of the year – just over six months ago.

Mr Dhar didn’t have much hope for those motorists hoping to switch to an electric vehicle to avoid having to pay high petrol prices.

‘Supply chain delays will be a key challenge for rapid EV adoption in Australia,’ he said.

Source

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