Australian motorists have been warned that higher fuel prices could persist as the conflict in the Middle East escalates and global oil prices rise above $US100 a barrel.
The average price of regular unleaded in Australia has reached $2.11 a litre, up sharply from $1.55 in July. Diesel prices have risen by almost 50 per cent since the end of June.
The increases have fuelled concerns about inflation and the prospect of the Reserve Bank of Australia raising its cash rate when its monetary policy board next meets at the end of September.
Peter Khoury, a spokesman for the motoring organisation NRMA, said the outlook depended largely on developments in the Middle East, where oil tankers were being targeted in the Strait of Hormuz.
“It really depends exclusively, almost, on what’s going to happen in the Middle East,” he told AAP.
“We’ve seen dangerous levels of escalation in the last few days, so you’ve got the situation where they’re blowing up each other’s oil tankers in the ocean, so that doesn’t help.”
About one fifth of the world’s oil passes through the Strait of Hormuz, where fighting has centred on control of the key shipping route.
Mr Khoury said elevated fuel costs were likely to become “the new norm”, while suggesting the Australian Government should retain flexibility as the crisis develops.
“Even though the average price for unleaded nationally is $2.11, in April it was $2.60, and that was at that point when the government cut the excise,” he said.
“We’re nowhere near where we were when we hit those record high levels. It is obviously expensive, more expensive than we want it to be, but it’s nowhere near those levels.”
The Albanese Government temporarily halved fuel excise in April, reducing the charge by 26 cents a litre. A reduced extension, cutting petrol and diesel excise by 16 cents a litre, remained in place until August 2.
Mr Khoury urged motorists to monitor fuel prices in real time and compare stations before filling up in an effort to limit the impact of rising costs.
