Fuel prices fluctuate

Fuel prices fluctuate

Mount Gambier continues to remain one of the cheapest regional cities for fuel prices in South Australia.

As of last Friday, there was roughly a 20-cent difference between service stations in Mount Gambier with the dearest at $1.96 per litre and the cheapest pumping in at $1.759 per litre.

Meanwhile, Naracoorte reported a difference of about 10 cents per litre between fuel stations.

The RAA is encouraging motorists to get into the habit of looking at a fuel application before they fill up to enable them to buy the cheapest fuel.

Crude oil is a raw natural resource extracted from the earth and refined into products including diesel and petrol.

The fundamental driver for fuel prices in the last two years has been due to the supply of crude oil not being able to keep up with demand following COVID-19.

Paired with that, effectively 8% of the supply was pulled out of the market because western countries refused to buy oil from Russia due to their involvement in the Ukrainian Conflict, driving up the prices of crude oil.

RAA senior mobility manager Mark Borelace said it was his understanding that even though Russia was not able to export as much crude oil as they did, they were making more money because the price has risen so high.

“That’s flowed into the international market and that’s caused prices of a lot of things to go up including the cost of shipping and the cost of getting food to markets which is driving inflation,” he said.

“The Reserve Bank is trying to put up interest rates to manage inflation so there’s a risk now there could be a recession.

“Everybody’s panicking about trying to get the cost of the oil down, so it is not part of the creation of the recession.

“The reality is the world needs a bit more supply to the market to drop the cost.”

Mr Borelace advised motorists to shop around, only buy the cheapest fuel and minimise car use where possible.

“We think it’s going to stabilise for a little while, we have just seen about 10 days ago, a slight increase in crude oil, that’s within the normal sort of fluctuations,” he said.

“So, we’re just waiting to see whether the market is starting to become more comfortable, there’s going to be enough supply and if that happens, then the prices will stabilise.

“They have been stabilising for the last month or so, before they were fairly volatile, sometimes shifting dollars a barrel in a week leading to 10% rises.”

The Federal Government halved the fuel excise for six months until September 28 which will add about 24 cents onto fuel prices when it is reinstated.

Mr Borelace warns when the fuel excise cut is reinstated, consumers will be paying around $2 a litre for the terminal gate price which is the wholesale price that comes out of Adelaide.

“Today it was basically $1.64 and if you put that 24 cents back onto that, it makes $1.88 as the base price and then there’s normally on average a 10 or 11 cent margin on that,” he said.

“That is almost double what customers were paying 15 months ago which is why it is such a hit on the budget for people and all these costs flow into the price of delivery.

“We are still in uncertain times and at the same time, we have got a better-than-expected uptake of electric vehicles.

“So, people are starting to think you know what, I might try and bypass all this malarkey and just get myself an electric vehicle.”

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