Dollar’s easing fuel pain
STIFF resistance from the Australian dollar is helping keep a cap on rising petrol pump prices as New Year holiday travellers hit the roads.
Aussie motorists now pay, on average, 10 cents a litre more when they fill up compared with this time last year when they paid $1.25 a litre, on average.
CommSec estimates an Aussie family pumps about $229 every month into the family car, $25 more when compared with this time in 2017.
But CommSec chief economist Craig James says it could have been worse for motorists if the Australian dollar had fallen rather than risen in the past 12 months.
He said a falling Australian dollar would have made imports of oil, which is priced in US dollars, more expensive, but thankfully the local currency had lifted from 72US cents to 78US cents in 2017.
The currency gain had offset the rise in oil prices which had been brought about by OPEC-led production restrictions to tackle a global oversupply.
In 2017, the Nymax price of crude oil jumped 12.5 per cent, with Brent leaping 17 per cent.
Brent, at 2pm yesterday, was just above $US67 a barrel. West Texas Intermediary (WTI, or US) was approaching $US61. “There are no signs as yet of a softening of oil prices, but a firm Aussie dollar is serving to restrain pump prices for local motorists,” Mr James said in a statement.
Yesterday, the Australian terminal gate, or wholesale, price for petrol stood at 123.3 cents a litre after hitting a sixweek low of 123.0 cents a litre last Thursday.
Mr James said that Sydney and Adelaide pump prices were nearing the lows in their current discounting cycle, while Melbourne and Brisbane prices “still have some way to go to”.