Fuel prices in Australia hit last week the highest level since March as the hostilities in the Middle East drove international crude oil prices to the highest in two months.
Australia’s nationwide gasoline prices hit in the week ending July 26 the highest since the end of March, at US$1.27 (AUS$1.82) per liter, which is about a quarter of a gallon, according to the Weekly Petrol Prices Report of the Australian Institute of Petroleum published on Monday.
Diesel prices also jumped nationwide last week to the highest since March, adding pressure to Australia’s economic prospects and monetary policy.
The most recent de-escalation sent international oil prices tumbling early on Monday, but it’s unclear yet whether diplomacy would prevail over hostilities, or for how long.
Despite the fact that it is a major gas and LNG producer, Australia relies on imports for most of its transportation fuel supply. The situation became worse in March with the Hormuz crisis and after a fire broke out at one of the only two refineries in the country.
At the end of March, the Australian federal government halved the fuel excise on gasoline and diesel for three months in a bid to alleviate financial stress for consumers due to the spiking fuel prices.
Then the Federal Government in April said it had secured approximately 100 million liters of additional diesel, with two shipments coming from Brunei and South Korea. This was the first of the expected shipments of fuel secured under the Government’s new Strategic Reserve powers.
In May, Australia even secured three shipments of jet fuel from China, and more are expected in the coming months as Australia was scrambling to ensure its fuel supply amid the global crunch, and one of its only two refineries was out of operation due to a fire.
Australia’s Minister for Foreign Affairs, Penny Wong, commented at the time that “Australia is working with countries in our region to respond to this unprecedented shock to the global economy and ensure the continued flow of essential fuels.”
By Tsvetana Paraskova for Oilprice.com
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