Global oil prices have just seen their seventh successive weekly gain, which has pushed the price of fuel to levels not seen before in Australia.
The oil price that matters for motorists in Australia is the Singapore gasoline 95 price, CommSec chief economist Criag James said.
“That price sits at lofty 13.5-year highs, courtesy of global crude prices and a weaker Australian dollar.
“Put those two together and Australian motorists are paying the most for petrol that they have ever paid.”
In fact, the average Aussie household spent a record $246.66 on fuel last week, Commsec calculated.
“Filling up the car with petrol is the single biggest weekly purchase for consumers,” James said.
“While high oil prices are positive for Australian producers, and the energy sector generally, the higher cost for petrol reduces spending power for consumers and adds to inflationary pressures.”
And to make matters worse, James said the dent in the hip pocket wouldn’t be easing anytime soon, with the major oil producers struggling to meet demand.
Why are suppliers struggling to produce oil?
OPEC refers to the Organization of the Petroleum Exporting Countries and OPEC+ refers to the member countries plus other major oil-producing nations that are not part of the organisation.
OPEC is a cartel made up of 14 countries that decide how much oil they will produce and release to the market to control the price.
“OPEC+ oil producers have agreed to lift production quotas, but a number of producers are finding it hard to meet the quotas,” James said.
“Then you overlay the Ukraine-Russia tensions, cold weather in the US and drone attacks by foreign militants on oil facilities in the United Arab Emirates. Oil supplies will continue to struggle to keep up with demand.”
While Russia is not a member of OPEC, it is one the largest oil producers in the world and so has a seat at the table when OPEC meets.
So, the myriad of incidents occurring around the world is impacting how much it costs you at the tank.
The national average unleaded petrol price in Australia last week rose by 2.3 cents to a record 171.9 cents per litre, according to the Australian Institute of Petroleum.