√Relief on the horizon with fuel prices set to fall

As we head towards Christmas, fuel prices appear as if they could be about to become cheaper across the country.

Australian households may get some relief coming into the holiday season, with global indicators pointing to potentially lower fuel prices in the coming weeks.

Crude oil prices contracted more than 3 per cent last week – well below the $US80-per-barrel threshold – while wholesale prices from Singapore, which directly supplies Australia, are down almost 4 per cent in a month.

According to commodities expert David Scutt, wholesale unleaded prices are down 20 per cent from record highs in recent months – suggesting 200 cents per litre should be the top of the price cycle, not the average.

While a future price reduction at the pump isn’t guaranteed, the effect of increases in global oil stockpiles should trickle down in the coming weeks to help ease price pressures at a retail level.

The national average as of Sunday 19 November was 200.9 cents per litre of unleaded, up slightly from 194.8cpl on 29 October, but down from all-time historic highs of more than 211cpl in early October. The average in metropolitan areas sits at 201.4cpl for unleaded.

Mogas-95 gasoline price down 20% from the recent highs in $AUD terms. All else being equal, unleaded 91 petrol should be around $2 per litre at the top of the price cycle, rather than the bottom #ausbiz #auspol @mrbenzachariah pic.twitter.com/il1ZsShuZ3
— David Scutt (@Scutty) November 17, 2023

However, the Australian Dollar could be in for another pull-back, seemingly unable to push beyond $US0.65 in recent days – which could undo some of the lower prices headed our way from the oil markets.

If the price of petrol and diesel does reduce coming into December, it could offer some welcome relief for Australians, who on average spend around 15 to 16 per cent of their household income on transport costs – including fuel.

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