8 March 2022

Low-income households scraping the barrel as Canberra fuel prices hit record high

| James Coleman
Join the conversation
180
Petrol pump

As of Tuesday, 8 March, the average price of unleaded petrol in the ACT is $1.94, the highest it’s ever been. Photo: Michelle Kroll.

Petrol prices in Canberra have hit a record high, with the average price for unleaded fuel heading towards $2 per litre, causing mounting concern over what it means for those already struggling to make ends meet.

The average price of unleaded petrol in the ACT began the year at $1.68 per litre. As of today, 8 March, it has risen to $1.94. The cheapest is available in Fyshwick at $1.84 while the most expensive is in Braddon at $1.97. This is the highest price Canberra has ever seen.

Since the beginning of 2022, global oil prices have spiked by 60 per cent, with flow-on effects at bowsers across the world.

The Australasian Convenience and Petroleum Marketers Association (ACAPMA) is the national peak body representing the interests of Australia’s fuel wholesale, distribution and retail industry, and it said the market has been growing increasingly “nervous” as the Russia-Ukraine crisis unfolds.

Russia is the second biggest producer of oil in the world, at almost five million barrels every day. By comparison, Australia produces 350,000 barrels per day.

READ ALSO Threat of Russian conflict driving Canberra’s fuel prices up

“The market is speculating about the potential loss of that much oil, on the basis that Russia’s supply lines get cut off as a result of the war, or – more likely – the world prohibits the import of Russian oil,” ACAPMA CEO Mark McKenzie said.

“The market is now really nervous and traders are having to guess what supply will look like over the next few months.”

The US and several European nations have announced they are exploring banning imports of Russian oil in an effort to cripple the invader’s economy, but these countries – along with Australia – are trying to firm up a steady supply from the Organisation of the Petroleum Exporting Countries (OPEC) first.

OPEC is an intergovernmental organisation made up of 13 countries, all with extensive domestic reserves. Last week, the Morrison Government joined with 30 other economies to pressure these countries to use these reserves and free up global oil supply.

Mr McKenzie said, until this is sorted, the price will continue to “bounce around all over the place”.

Man pumping petrol

Never before has it been so painful to fill a car. Photo: Michelle Kroll.

Treasurer Josh Frydenberg has previously rejected calls to cut fuel excise, which contributes $11 billion every year to the Federal coffers, saying the money goes directly into funding vital infrastructure projects.

Not only is there a question mark over supply, Australia is also contending with a weak exchange rate. One Australian dollar currently buys 73 US cents.

“Oil trades in US dollars but we pay for it in Australian dollars, so the issue for us isn’t just where oil prices are going in US dollars, it’s the fact we’re paying for it with a weaker Australian dollar,” Mr McKenzie said.

READ ALSO Here’s everything you need to know about fuel

“The exchange is very important in looking at why it is historically higher than previous oil price records.”

All pressures on the oil price are upward but Mr McKenzie said, at some point, “economies around the world are going to pare back their demand as consumers look for alternative means of transport”.

“This flattening of demand will then kick off a chain reaction and the price will begin to drop, but we’ve still got a long way to go before we hit that point, and oil is an essential product – business and industry still need it.

“At the moment, the only thing that’s certain is the uncertainty.”

Dr Emma Campbell

ACTCOSS CEO Dr Emma Campbell. Photo: Thomas Lucraft.

After housing and food, transport is the next biggest item of expenditure for low-income households in the ACT, according to the ACT Council of Social Services (ACTCOSS).

ACTCOSS CEO Dr Emma Campbell said the significant increase in fuel prices meant more of these households were having to choose between filling the car and paying the rent.

“This impact will be compounded in Canberra where we have the highest house and unit rents and where we have seen significant increases in the costs of other essentials like food, energy, health, and education in recent years.”

Dr Campbell is calling on the ACT Government to provide more concessions and rebates for public transport and to reduce transports costs through rebates on drivers’ licences and vehicle registration.

“In the longer term, as the ACT aims to transition to net-zero greenhouse gas emissions by 2045, government planning and support will be critical to ensuring that households are not left behind,” she said. “At present, many households face significant barriers to purchasing an electric vehicle and accessing charging infrastructure.”

Join the conversation

180
All Comments
  • All Comments
  • Website Comments
Latest

Julie Macklin, you write longer responses than I do (I am retired too.) What if it was Saturday and a full moon what bus would you have caught then? My daughter is a bus user too and regales me with the numbers of buses I should use if I go into the Civic (rarely). More power to you. ?

Matthew No-lol Steer, so they were selling all of Broken Hill for 55 cents? Sounds like they overpriced it. ?

Capital Retro7:14 am 15 Mar 22

Warwick Bradly, before you mock people about their conspiracy theories do some chemistry revision because aluminium and tin are two different elements.

Yawn. Same story every time petrol prices go up

Can’t figure out why diesel is more expensive than unleaded. It’s less refined

Capital Retro5:38 pm 10 Mar 22

I believe the diesel we buy in the Southern Tablelands and the Snowy Mountains is refined more to ensure it works in the colder (sometimes -15C) temperatures. This puts an extra cost on it.

If I could get one. Went to order a Kia eV today. 2-3 year wait time. They are one of the only cars yet configured to give power back to the grid. Tesla’s don’t.

Capital Retro6:03 pm 10 Mar 22

Gee, the battery will be half-degraded by the time you get it.

And if you give power back to the grid the battery degradation will accelerate. It’s a false economy.

Nah. The battery degradation is almost nil compared to that of drive charging. See online ABC

The sanctions against Russia will hurt all of us. Why they introduced the sanctions is beyond belief. The Russians couldn’t give a toss, they have the oil and we don’t.

Its simple supply and demand, when demand goes down (russian sanctions) the price goes up. When demand is high, the price goes up. When the gov investigates price fixing the price goes down…. for a month.

Largely caused by inflation due to government actions over the last two years. Add on top of that the instability in Europe.

“after housing and food, transport is the next biggest item of expenditure”.

Well there’s your real problem – the exploitative cost of housing.

Put pressure on the government to take meaningful action here… https://epetitions.act.gov.au/CurrentEPetitions.aspx

I’m happy to pay more for petrol if it means doing my small bit to support the Ukrainian people, sticking it up Putin and hopefully stopping WWIII.

CEO of ACTCOSS, couple of points:

Yes, petrol is very expensive, but raising the issue of the cost of EVs and access to charging infrastructure, misses the point.
Low-income earners don’t buy EVs. We don’t buy the $20,000 cheaper ICEs either.
We buy used cars.

As for calling for concessions and rebates for public transport, drivers licences, rego etc, catching the bus at full fare is a lot cheap
than owning and running a car. Our family has 1 used car and for everything else, we catch a bus or walk. Many people travel on public transport at concessional fares or for FREE anyway.

The cost of a driver’s license amortised over 5 or 10 years, isn’t that much or year and as for registration costs, are you suggesting linking the cost of
rego to income? LOL.
It’s a bit like that debate about linking traffic fines to income.

“At present, many households face significant barriers to purchasing an electric vehicle and accessing charging infrastructure.”

Too right. Please take that on notice ALP/Greens/Coalition. Not everyone is rich like a politician

Capital Retro5:30 pm 08 Mar 22

Here’s a real bargain! Three year old low km. EV for a tad under $49,000:

https://www.lennocknissan.com.au/all-stock/view/2019-Nissan-Leaf/25923284

A typical Canberra battler could easily afford that.

Daily Digest

Want the best Canberra news delivered daily? Every day we package the most popular Riotact stories and send them straight to your inbox. Sign-up now for trusted local news that will never be behind a paywall.

By submitting your email address you are agreeing to Region Group's terms and conditions and privacy policy.