SUNGMI KIM/Stuff
Tuesday was the day when tax on petrol would have gone back up 29c a liter, the Government had not decided to extend relief for another two months in the May Budget.
The average price of ’91’ petrol has climbed above $3 a liter, according to price-checking service Gaspy, with the AA forecasting higher prices to come.
There are two months to go before the Government’s temporary fuel tax cut of 29c/litre is due to expire, with no sign yet that an end to high oil prices or sky-high refining margins are on the horizon.
Gaspy reported that motorists were paying an average just over of $3.01 a liter on Tuesday, with ’95’ at just under $3.20 and diesel at $2.82.
AA principal advise policyr Terry Collins said its members were “screaming”, but he was hearing most complaints about the price of diesel which appeared to be closing in on ’91’ because of an international shortage.
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“There used to be quite a large differential, and now it’s smaller,” Collins said.
Diesel had reached $3 at some petrol stations, but there were still big variations in the price of fuel both within and between regions, he said.
Tuesday was the day on which the Government’s fuel tax cut of 29c a liter, including gst, would have come to an end, had the Government not agreed to extend the measure until August 14 in the budget.
But, from then, the average price for ’91’ could be sitting at about $3.30 a liter if market conditions don’t change.
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With the latest petrol price hike there has been a rush on buying electric vehicles (video first published March 2022).
There seemed little prospect of such relief on Tuesday, with Brent crude for August delivery bubbling up about US$2 a barrel overnight trade at US$122.50.
Rising oil prices have added about 30c to the price of liter of petrol since the start of Russia’s war on Ukraine, while soaring international refining margins have added about a further 35c.
“Refineries are absolutely killing it at the moment,” he said.
Collins saw no reason to think prices would ease either this year or longer term, noting analysts at US bank JPMorgan were forecasting the price of oil could reach US$140 to US$150 a barrel by the third quarter of this year.
“That would add another 20c to 30c on everything. It’s a bit of a one-way street, unfortunately.”
If the Government did not further extend the fuel-tax break, the price of higher-octane fuel would be “hitting $4 before too long”, he said.
Collins said climate change policies made it less attractive for businesses to invest in petrol-chemical infrastructure.
“We are going to be ‘squeezed up’ over the next decade.”
