Petrol prices finally deliver good news

I have become an avid watcher of fuel prices over the past couple of years. I used to fill up oblivious to whether the petrol price was at the top or bottom of its cycle. But like many Australians, I’ve felt the pinch brought about by the recent cost-of-living crisis.

As a result, I’ve started watching prices like a hawk, checking the electronic signs at every service station I pass. Even when my tank is full I can’t help checking.

The good news is, based on my observations, petrol prices have been considerably lower over recent months. In better news, the latest data from the Australian Competition and Consumer Commission (ACCC) backs me up. And in even better news, so do the most recent numbers from the Australian Bureau of Statistics (ABS).

ACCC welcomes lower petrol prices

The ACCC’s latest quarterly report shows that while average petrol prices were higher in the June quarter, they’ve since reduced. This drop was welcomed by ACCC commissioner Anna Brakey. “The lower prices since the end of the quarter have provided some relief to many motorists around the country,” she said.

Across Australia’s five largest cities – Sydney, Melbourne, Brisbane, Adelaide and Perth – retail petrol prices dropped in both July and August 2024. This has followed lower international refined petrol benchmark prices, the ACCC said in a statement accompanying the report’s release.

The July and August falls were a stark contrast to the trends in June for the five largest cities. Across those cities, the average June quarter cost was 3.3 cents per litre (cpl) higher than the March quarter. However, there were significant variations between those cities. For example Sydney’s average petrol price rose by 5.7 cpl, while Adelaide’s actually fell by 0.7 cpl.

What the ABS tells us

The ABS last week released its Monthly Consumer Price Index Indicator, which provides further context on petrol price trends. Overall the CPI rose 2.7 per cent in the 12 months to August, indicating a continued easing of inflation. The figure is lower than the 3.5 per cent in the 12 months to July. That in turn is lower than the CPI for the 12 months to June 2024, which was measured at 3.8 per cent.

The ABS figures for petrol for those three defined periods provides an interesting insight into the recent price falls. Fuel prices for the 12 months to June rose by 6.6 per cent, well above the CPI of 2.7 per cent. The increase for the year to July was 4.0 per cent, much closer to the overall CPI figure of 3.5 per cent.

However, the 12 months to August comparison is remarkable. The ABS figures show petrol actually plummeted in the year to August, dropping by a massive 7.6 per cent.

As remarkable as that figure is, it is not entirely explained by the recent retail price cuts. It is also a reflection of a huge jump in the petrol price in August 2023. The average retail price spiked by 9 per cent in that month. 

What is the petrol price outlook?

That’s a question few analysts are prepared to answer. Neither the ABS nor the ACCC are in the business of forecasting as a rule. A comparison between August 2023 prices (up 9 per cent) and August 2024 prices (well down) indicates seasonal changes play little if any part. The number of contributory factors – local and international – makes predicting petrol price trends a challenge even for the experts.

Your best advice might be to follow my lead (something I’d rarely recommend) – watch those petrol prices like a hawk.

Do you keep a close eye on petrol prices? What tips and tricks can you share? Let us know via the comments section below.

Also read: How petrol price cycles have changed

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