‘We’re nowhere near the peak’: Sydney petrol prices surge - SUV VEHICLE

‘We’re nowhere near the peak’: Sydney petrol prices surge

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Motorists in Sydney have spotted petrol prices as high as $2.35 a litre, with experts urging consumers to shop around as there are “still discounts to be had”.

Petrol prices at some service stations in Sydney are hitting $2.35 a litre or more, with motorists warned fuel price hikes will continue to spread over the coming weeks – and no capital city is safe.

According to the NRMA, the average price for regular unleaded fuel in Sydney is 201.4 cents per litre, but there was a substantial discrepancy between the most expensive and most affordable prices around the city.

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Petrol Spy data put the most affordable prices in Sydney around 178 cents per litre for regular unleaded, but dozens of petrol stations around Sydney have already hit 235.9 cents per litre.

Mark McKenzie, CEO of the Australasian Convenience and Petroleum Marketers Association (ACAPMA), told Drive the high prices were the result of Sydney’s petrol price cycle being in its upward phase.

“We saw a drop into the Easter break as a result of the cycle being on the downward trend. What we’re seeing is it’s now starting to increase,” he explained.

Mr McKenzie said Sydney was “nowhere near the peak” of its petrol price cycle, meaning there were still discounts to be had.

“What’s newsworthy about where we are now is we’ve just started going through the upward phase, so there’s a significant difference between the stations discounting and the stations hiking,” Mr McKenzie explained.

“Contrary to popular belief, not everyone goes up at the same time. We’re a third of the way into the peak, so this is the time people need to be savvy and shop around. This is when you use fuel price apps … You could save yourself up to $25 per tank by using apps.”

Craig James, Chief Economist at CommSec, said the average petrol price in Sydney was “fair” based on wholesale prices.

“Usually you add a gross margin of around 15 cents per litre to the wholesale price and the wholesale price is sitting around $1.88, so that suggests a fair price is around $2.03 a litre,” Mr James told Drive.

‘Melbourne is going to be going up as Sydney is coming down’

While Sydney prices might be hitting a peak earlier than other capital cities, motorists around the country should also prepare for higher prices at the bowser.

At the time of publishing, the RACV had Melbourne’s average unleaded price at 191.2 cents per litre – 10 cents per litre less than Sydney’s average price.

“Sydney’s price is higher than Melbourne because they’re at different points in the price cycle,” Mr McKenzie said. “Melbourne is going to be going up as Sydney is coming down.”

Motorists in Adelaide and Canberra were actually feeling the pinch more than those in Sydney – with Informed Sources data showing Adelaide’s average price at the start of the week as 216.4 cents per litre, while Canberra’s was 212 cents per litre.

Meanwhile, Perth, Hobart, Darwin and Brisbane are all at lower points in their respective petrol price cycles.

Generally speaking, experts say Australian fuel prices aren’t “skyrocketing”, but rather remaining consistently high – something that can cause consumers to cut back on expenses in other areas.

“Prices aren’t escalating, but they’re staying high because global oil prices are staying high and the Australian dollar has continued to be weak,” Mr McKenzie explained.

“Prices of 235 cents a litre are the highest we’ve seen this year, but it’s only been four months. If you go to the period just after the Russia and Ukraine crisis, we were seeing prices as high as 240 cents a litre and we haven’t seen those since.”

Mr James added the consistently high fuel prices could cause problems for the Reserve Bank of Australia.

“It does complicate it for the Reserve Bank with petrol prices rising – it can mean inflation remains stubbornly high, and if that happens the Reserve Bank might take a bit longer when deciding when to cut interest rates,” he explained.

“However, when petrol prices amp up … the average motorist might have to cut back in spending in other areas, like takeaway food or social events, so there’s an inflationary aspect to it but there’s also a contractionary influence on it too.”

The post ‘We’re nowhere near the peak’: Sydney petrol prices surge appeared first on Drive.

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