$3 a litre could be new normal, says AA

or you are thinking about changing your vehicles, look for that more efficient, safer vehicle. Now is the best time to start looking.’’

On top of sanctions against Russia, and damage to fuel infrastructure as part of the war between Russia and Ukraine, any spare capacity would dry up if the European Union introduced a ban on Russian oil imports. That followed a ban on Russian coal and discussions over a ban on importing Russian gas.

‘‘A lot of Europe relies upon Russian gas and coal. Well if you can’t get gas and coal, you have got to use oil, so it is a perfect storm for price increases currently,’’ Collins said. At the same time, demand was set to begin rising worldwide, when Covid lockdowns ended in China and with airline travel increasing.

The rising price of petrol and diesel was adding to inflationary pressures, pushing up the cost of farm production, transport, and down the line to consumers, he said. ‘‘We are just in autumn, we have come through the horticultural season, the wine season, all of those things require diesel for the harvesters, so they will be paying a lot. Then of course everything that goes into the factory and everything that comes out of the factory requires a truck and they run on diesel.

‘‘So all those prices are flowing through and are having a marked inflationary effect.’’

Brent crude, used as an international benchmark, was trading above US$100 a barrel and Collins expected it to remain above that mark for the rest of the year.

It was hard to know if petrol would hit $4 a litre this year but it was possible. ‘‘I wouldn’t bet it wouldn’t happen ... because it really does come down to how severely these sanctions occur against the Russians and how long the conflict does last, and the extent [Russia and Ukraine] want to do mutually assured destruction of each other’s infrastructure around petroleum and fuel.’’

Higher fuel prices would make some people cut back on their vehicle use, for example walking to the dairy instead of driving, and combining trips together where possible. But some people would not have a choice.

‘‘It is the more marginalised, low income people that have not got good access to public transport because of the way it is arranged that have to use vehicles. They are the ones that are probably going to get hardest hit – they are like the factory workers and the cleaners who have multiple jobs in the household and they need multiple cars because they are going different places at different times.

‘‘They will find it hard.’’