‘Transition out of COVID’: Rising petrol prices hit Queensland motorists as producers take cautious economic approach
Petrol prices in Brisbane and South-East Queensland are on the rise again, after a brief drop that followed record highs in late November last year, but industry players say it is likely to remain steady for the summer break.
- The average fuel price in Brisbane on Monday was 175 cents per litre
- High prices over the past 18 months were partly because global demand was underestimated by petrol producers
- In 2021, out of all Australia's capital cities, Brisbane had the second-highest average price for regular unleaded petrol
RACQ's Annual Fuel Price Report for 2021 reported that Brisbane last year experienced its "highest-on-record average retail price for 91 Regular Unleaded Petrol (RULP), at 150.8 cents per litres, exceeding the 2020 average of 124.9 cents per litre".
The average fuel price in Brisbane on Monday was 175 cents per litre, with many retailers selling it for as much as 191.9 cents per litre, which has prompted concerns from consumers that prices could return to the high levels of late 2021.
In late November 2021, the average fuel price in Brisbane hit 186.3 cent per litre, a new record high daily average.
It has since fallen, but last week began to rise steadily, prompting concerns from consumers that the high prices of 2021 could be back for the new year.
The average regular unleaded petrol price in Brisbane was the second-highest of Australia's capital cities in 2021.(ABC: Nic MacBean)Catch up on the main COVID-19 news from January 11 with a look back at our blog.
The RACQ report stated that high prices in 2021 were caused by a return of demand for oil products because global demand had grown as economies rolled back COVID-19 restrictions.
"This was coupled with limited supply, partly caused by [the Organization of the Petroleum Exporting Countries], the oil producer cartel, limiting production and partly by oil production failing to ramp-up quick enough after the COVID shutdowns in 2020," the report said.
The average regular unleaded petrol price in Brisbane was the second-highest of Australia's capital cities in 2021.
Brisbane sat ahead of Sydney by just 0.1 cents per litre, with its daily average 150.7 cents per litre, and just behind the most expensive in Hobart, which was 150.9 cents per litre.
'Transition out of COVID'
Australasian Convenience and Petroleum Marketers Association's chief executive, Mark McKenzie, said Queensland — and, in particular, Brisbane — actually recorded an average fuel price that was below the national average for December, and that prices had now stabilised over the past month at an average of 165 cents per litre.
"Our fuel wholesale price is effectively vulnerable to the vagaries of the global market," he said.
"We're prone to the ups and downs of the global economy.
"Now, with COVID having wrought havoc on economic communities, the challenge for our industry has been to estimate how quickly economies can recover and make sure that we've got sufficient fuel to meet that demand."
He said when prices were high in the past 18 months, it was partly because global demand was underestimated by producers.
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Mr McKenzie said that fuel producers were being cautious with the amount of fuel that was being produced, so they were not stuck with excess stock if economies had to close down as they "transitioned out of COVID".
"We've got an additional factor, post-COVID, which is an uncertainty premium and that's been factored in by both oil producers and fuel refiners, and that's because it's new, it's increasingly difficult to predict," he said.
Fuel producers are being cautious with the amount of petrol being produced, to prevent being stuck with excess stock if economies close down.(ABC News: Che Chorley)
He said when factoring in inflation, the highest average fuel prices the country had seen were in 2007-8 and in 2014 and the past year had not represented a "massive peak".
"If you think of about everything we're buying at the moment, post-COVID, I'd be challenged to name anything that isn't reporting the highest price that we've seen in recent memory, whether that be food, fuel, timber or insurance premiums," Mr McKenzie said.
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