The Australian Institute of Petroleum today advised that changes in the international petroleum markets are putting upward pressure on pump prices.
"Petrol prices in Australia are set on the price of available product in Singapore, which is a benchmark for prices in the Asian region. The reason pump prices follow Singapore refinery prices is that petrol from Australian refineries must compete against imports from Asian refineries, regardless of the cost of importing and refining crude oil," the Institute Executive Director, Mr Bryan Nye, said today.
"Over the past two months, the price of petrol ex Singapore has increased from 29c per litre to 36c today, a rise of 7c per litre. Once you add in Federal Government excise of 38.1c, GST of 10% and reasonable margins for wholesaling and retailing, prices could soon exceed 90c per litre in most capital cities although local competition pressure could cause a variation from that figure at the pump.
"The increase in Singapore prices is a result of increases in both the cost of crude oil and the margin for processing that crude oil in refineries. Crude oil prices have been rising steadily over the past weeks and yesterday reached a six month high.
"There is no capacity for oil companies to avoid price increases because of continuing poor financial results. The industry made an underlying loss of $160 million in 2000 (the last year for which industry financial results are available)."
"However as the attached table published by the International Energy Agency (IEA) clearly shows, the Australian petroleum industry is intensely competitive and is recognised as delivering petrol prices among the lowest in the world."