A number one Australian vitality skilled has mentioned he "would not be stunned" if Australian petrol costs hit as excessive as $2.50 a litre because the oil market is squeezed by a number of components.
CEO of vitality advisor agency EnergyQuest Graeme Bethune wrote a web-based Q&A addressing plenty of questions he had acquired in regards to the affect the battle in Ukraine was having on oil and petrol costs.
Mr Bethune mentioned the oil market was "very tight" even earlier than Russia's invasion of Ukraine because the speedy restoration from the COVID-19 pandemic despatched demand for oil hovering.
"COVID smashed oil consumption, oil costs and funding in provide in 2020. There may be additionally a rising international consensus about the necessity to attain internet zero by 2050 and subsequently that peak oil demand is imminent and there's no want for additional exploration," Mr Bethune wrote.
"That has all discouraged funding in provide. Since 2020 oil demand has roared again with the post-COVID restoration however even OPEC is unable to realize its manufacturing targets. That has all put strain on costs.
"Then, on high of that there's all of the uncertainty created from the Ukraine state of affairs and the Russian invasion."
Consequently, Mr Bethune mentioned he "would not be stunned in the event that they [Australian petrol prices] received to $2.50".
Whereas on the larger finish of some estimates, Mr Bethune's conclusion that hovering oil costs would affect the wallets of motorists is shared by many specialists.
Two days in the past Chief Economist at CommSec Craig James mentioned petrol costs are "on track" to hit as excessive as $2.20 over the subsequent few weeks.
"The Australian terminal gate or wholesale value is round $1.78 a litre. Add a gross retail margin of 12-13 cents a litre and the nationwide common value is prone to carry to $1.90 a litre," Mr James wrote in a analysis word.
"And primarily based on the US$20 carry in Brent crude final week, common Aussie petrol costs will quickly be $2.10 a litre."
Mr James mentioned the flow-on impact of households stretching their price range to cowl their gasoline invoice will likely be a discount in non-essential spending, in the end hurting the economic system.
"The common Australian household is spending a document $257.46 a month on petrol, up $35 from the start of 2022," Mr James mentioned.
"That's successfully 'useless' cash or a tax on consumption, which means that customers need to both reduce on nonessential spending or dip into financial savings."
The NRMA's most up-to-date Weekly Gas Report confirmed that the common value of a litre of normal unleaded petrol is at the moment simply shy of $1.90.
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Is the price of petrol forcing you to chop again on different family bills? We wish to hear from you. Contact reporter Stuart Marsh at smarsh@9.com.au