The Executive Director of AIP, Dr John Tilley said that "the current high petrol prices are caused by international market pressures – not price gouging by major oil companies. In particular, strong demand for petrol – particularly in the US – has occurred at a time of tight petrol supply across the globe. This has led to increased market prices for petrol – not crude oil."
- Crude oil, petrol and diesel are bought and sold in their own markets and each market is typically regionally based. There is arbitrage between regional markets.
- Price movements and developments in regional petrol markets, not crude markets, will provide the best guide to underlying petrol price movements in Australia.
The Singapore price of petrol (MOPS95) is the relevant indicator for understanding and following movements in the 'underlying' petrol price in Australia. Movements in MOPS95 can be easily tracked each week via AIP's Weekly Petrol Prices Report and via the AIP website at www.aip.com.au/pricing.
Dr Tilley said "in recent weeks, we have seen strong demand for petrol in the Asian region and increased arbitrage activities to the West Coast of the US. These demand pressures – particularly in the context of tight global supply – have naturally caused an increase in the price for MOPS95".
- Currently there is strong demand for petrol in the US, largely caused by the US 'summer driving season', the annual switch over to 'summer blend' petrol, and some unexpected refinery outages/maintenance.
Australian wholesale and retail prices have increased as a result of increases in MOPS95.
Dr Tilley said "it is unfortunate that some commentators continue to create unnecessary anxiety in the community, rather than seek to understand and present the facts and improve the public's understanding of the key market influences on petrol prices. Australian petrol price movements closely follow international petrol price movements, not crude oil price movements."
Dr John Tilley
Executive Director, AIP
(02) 6247 3044