Global Oil Prices Down 10%, But Relief to Reach Australia In A Week
Synopsis
Australians are set for a win as global oil prices tumbled 10% following the reopening of the Strait of Hormuz. Prime Minister Anthony Albanese welcomed the news, noting that essential trade routes are moving again. While local prices have already fallen by 50c this month, it will take about a week for the latest global drop to reach Australian service stations. Energy Minister Chris Bowen confirmed that the nation’s fuel reserves are healthy and that recent refinery issues in Geelong will not drive up costs for consumers.
Australian drivers can look forward to lower prices at the pump for petrol and diesel now that the Strait of Hormuz is back open. Global oil prices have already gone down 10 per cent in price, but it may be a week before these savings are passed on to local service stations.
Key Highlights
- Iran reopens important shipping line, global oil prices down 10%
- Fuel prices in Australia have already eased around 50c since early April
- It will take a week for the global price decline to appear in petrol pumps across the country.
Waiting for Lower Prices at the Pump
As news broke that the Strait of Hormuz had been reopened, Prime Minister Anthony Albanese said it was very good for global trade on Saturday. But experts are cautioning that there won’t be a “significant decline” in costs for Australians overnight. The key is that Australia tracks the Singapore fuel market, which has no activity at weekends and domestic wholesale prices will not start to respond until Monday. Industry leaders predict it will take about a week for the lower prices to make their way through the system and market before reaching the average driver.
The reasons behind price drops and how much you could potentially save
The primary factor behind the lower cost of fuel is the unlocking of the global oil stranglehold. This fear goes away, that we have a shortage of gasoline on the global market, with Iran opening the Strait of Hormuz for commercial ships. The government is already doing its part to bring down costs in Australia too by slashing the fuel excise and suspending GST on petrol, a saving of approximately 32c per litre for drivers. The national average price for unleaded also fell by 50c to date in April, aided further by sinking global prices.
Australian Energy Minister Chris Bowen also confirmed good news on fuel security. In addition to the recent war-related crisis, the country has successfully maintained its reserves at 46 days of petrol and 31 days of diesel. Earlier this month, a fire at the Viva Energy refinery in Geelong will also not push prices upwards. That is because the cost of fuel in Australia is determined by global markets, not local mishaps. There is plenty of stock across the country, with very few service stations reporting any shortages.
In anticipation of enduring peace
The drop in prices is welcome news, but the government and the NRMA have both cautioned that lower costs are reliant on a breach of the ceasefire. “Freedom of navigation,” Prime Minister Albanese said, “has to be permanent to underpin the world economy.” Now Australia has reached a new supply deal with Singapore to ensure even more diesel and petrol arrive in the country. This could mean all Australians see sustained low fuel prices if peace talks scheduled for London next week are successful.
FAQs
- When Will Petrol Prices Decrease In Australia
Global prices already have a deep impact, but it normally takes about a week for those savings to start showing up at the pump.
- How much has the price of fuel fallen back this month?
Since April 1 the national average for unleaded petrol has fallen by nearly 50c a litre.
- Australia reserves how much fuel?
The amount of petrol in storage is now 46 days and diesel is at 31 days.
- Is the fuel tax cut still in place?
The federal government has cut the fuel excise in half and suspended GST on fuel for three months to try to reduce the price tag.
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