(Australian Associated Press)
Motorists have enjoyed a bout of cheap petrol prices over Easter, but they could soon be forking out more to fill up their tanks.
Average petrol prices fell 0.4 cents a litre to 112.3 cents last week, according to the Australian Institute of Petroleum.
That’s the lowest level in the week ahead of Easter for 11 years, CommSec chief economist Craig James said.
Fuel is the single biggest purchase made by households on a weekly basis, so paying less at the pump is good news for consumer confidence, he said.
“The low price of petrol represents a de facto rate cut for consumers,” Mr James said.
“So, as long as petrol signboards show $1.00-$1.20 a litre in major capital cities, spending growth will be supported.”
Petrol prices hit seven-year lows a month ago as global crude oil prices slid on concerns of a supply glut, CommSec economist Savanth Sebastian said.
“With OPEC negotiations breaking down, Iranian sanctions being lifted and US oil inventories at record highs, supply was well exceeding demand,” he said.
But prices have lifted modestly in recent weeks, and Mr Sebastian expects this to continue in the short term.
“In the last couple of weeks, we’ve seen significant cuts to investment and a lot of shale oil producers going out of business,” he said.
He tipped a substantial pullback in supply over the longer term, which will lift costs at the bowser.
Mr Sebastian urged motorists to watch signboards to nab bargains in the discounting cycle.
“It tends to blow out to 14-20 days but at the low end of the cycle you’re virtually buying petrol at or below cost, and you can save yourself around 20 cents a litre,” he said.