DIESEL fuel prices have continued to decline over the past month, despite the deteriorating political and military actions being seen in the key oil producing regions of the Middle East, North Africa and the Ukraine.
The easing in price is due mainly to a reduced global demand forecast due to a weaker economic outlook, coupled with higher output from OPEC oil-producing countries, the International Energy Agency’s Oil Market Report says. OECD refineries have tended to produce more oil since July due to concerns about escalating conflicts in Iraq, Libya and the Ukraine.
Prices for diesel in rural and regional areas of Australia averaged 157.9c/litre earlier this week, easing a further 2.6c since this time in July.
The consistent easing trend follows three months of stubbornly high diesel prices at or around 164c/litre at the start of the year.
Australia is only about 40 percent self-sufficient in transport fuels, meaning international market trends have a direct impact on local pricing.
As the graph published here shows, prices have continued to slide during August. The latest survey for the week ended August 24 conducted by the Australian Institute of Petroleum shows a national average price for regional and rural areas of Australia at 157.9c/litre, down 6.2c/l since the start of the year, but still a long way from the recent low-point in the cycle of 148c/l recorded back in May last year.
Based on this week’s AIP diesel price for regional/rural areas of Australia, filling a Toyota Landcruiser 200 series (138 litres, main and auxiliary tanks) today would cost $14 more than the same fill back in mid-May last year.
Biggest declines in regional diesel price this month have been seen in South Australia and Tasmania. The Northern Territory bucked the trend, easing just 0.1c/l.
Regional non-metro diesel prices in the latest AIP report for the week ended Sunday included:
- Victoria 154.2c/litre (down 2.4c/litre since mid-July)
- NSW 158.6c (down 2.4c)
- Queensland 157.3c (down 2.5c)
- WA 161.8c (down 2.3c)
- SA 154.7c (down 3.7c)
- TAS 164.8c (down 3.3c), and
- NT 176.c (down 0.1c).
The reported prices are calculated as a weighted average of retail diesel fuel for country regions in each state/territory. All values include GST.
Variation in fuel prices can have a considerable impact of cost of production across the Australian beef industry, impacting on livestock transport, cost of shipping in live cattle and boxed beef exports, pumping stock water and providing station electricity in remote locations.
Crude oil, diesel and petrol prices are closely linked, as the price of crude oil accounts for the majority of the cost of producing a litre of petrol or diesel. Crude oil is purchased in US$, meaning that changes in the value of the A$ against the US have a direct impact on the relative price of crude oil in A$ terms.