Petrol prices at 29-month high
New figures show the cost to motorists of filling up their fuel tanks is at a 29-month high.
The Australian Institute of Petroleum says the national average price of unleaded petrol rose 2.9 cents to 139.2 cents a litre at the end of last week.
Over the past three weeks the cost of fuel has risen 4.4 cents a litre on average.
Commsec economist Savanth Sebastian says motorists are paying $30 per month more for fuel than they were six months ago.
He says motorists should brace for further pain at the bowser.
"Unfortunately for motorists it is looking like it will go higher over the next fortnight," he said.
"We're anticipating about another 4 cents increase in petrol prices in the coming weeks."
Mr Sebastian says petrol prices will hit $1.50 a litre within a few weeks, as the price of crude oil rises on the back of political unrest in the Middle East and North Africa.
"The political tensions is the key driver. Once that stabilises I think you may see that petrol prices will moderate to some degree," he said.
"But keep in mind that another driver for petrol at the moment is the strength of the US economy. The Asian economy is seeing a lot of strength as well, and that does mean that petrol prices in the longer term will remain elevated."
Mr Sebastian says buying fuel is the single biggest cost for most households and that the hike will have an impact on the retail sector.
"There's no doubt that it is having an impact in terms of spending. You look at retail sales indicators and it's showing clearly that retail sales will remain relatively depressed," he said.
"In fact it really is discretionary spending that has really come off the boil, and retailers will continue discounting in the coming months to ensure they maintain turnover."
Last month Australian motorists were warned to brace for a spike in petrol prices due to unrest across the Middle East.
US Federal Reserve chairman Ben Bernanke also warned the oil price hikes could put the country's economic growth at risk.
But he said while turmoil in Libya was having an impact on the price of oil, it should be temporary and modest.
New figures show the cost to motorists of filling up their fuel tanks is at a 29-month high.
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| Commsec economist Savanth Sebastian says motorists should brace for further pain at the bowser. |
The Australian Institute of Petroleum says the national average price of unleaded petrol rose 2.9 cents to 139.2 cents a litre at the end of last week.
Over the past three weeks the cost of fuel has risen 4.4 cents a litre on average.
Commsec economist Savanth Sebastian says motorists are paying $30 per month more for fuel than they were six months ago.
He says motorists should brace for further pain at the bowser.
"Unfortunately for motorists it is looking like it will go higher over the next fortnight," he said.
"We're anticipating about another 4 cents increase in petrol prices in the coming weeks."
Mr Sebastian says petrol prices will hit $1.50 a litre within a few weeks, as the price of crude oil rises on the back of political unrest in the Middle East and North Africa.
"The political tensions is the key driver. Once that stabilises I think you may see that petrol prices will moderate to some degree," he said.
"But keep in mind that another driver for petrol at the moment is the strength of the US economy. The Asian economy is seeing a lot of strength as well, and that does mean that petrol prices in the longer term will remain elevated."
Mr Sebastian says buying fuel is the single biggest cost for most households and that the hike will have an impact on the retail sector.
"There's no doubt that it is having an impact in terms of spending. You look at retail sales indicators and it's showing clearly that retail sales will remain relatively depressed," he said.
"In fact it really is discretionary spending that has really come off the boil, and retailers will continue discounting in the coming months to ensure they maintain turnover."
Last month Australian motorists were warned to brace for a spike in petrol prices due to unrest across the Middle East.
US Federal Reserve chairman Ben Bernanke also warned the oil price hikes could put the country's economic growth at risk.
But he said while turmoil in Libya was having an impact on the price of oil, it should be temporary and modest.
