Bad news for Australian fuel prices

Australia, you have two weeks before a massive fuel price wave hits us, and this time there's no government fuel excise relief to save us.. The price of Brent crude oil has risen to US$117.35 a barrel.. That's the highest level we have seen in six months, foretelling a looming spike in the cost of petrol and diesel in Australia… again..

But this time around it'll hot a lot harder with no cut to the Fuel Excise to cushion the blow.   Brent crude is fascinating.. It's a kind of oil found in 1971 in the Brent oil field in the North Sea, and even though it's not a particularly special oil in itself, the price of it has become the indicator of the world's oil price.. When the price of Brent crude goes up, oil prices are raised globally and then the clock starts ticking before the increase reaches petrol and diesel prices..

The ACCC says two weeks is generally the time for an increase in Brent crude oil price to flow through to a hike in petrol and diesel prices at the pump in your suburb.. The price rise process is a chain that starts with a rise in Brent crude price, that causes a rise in refined fuel prices in Asia, that causes a rise in wholesale prices in Australia, which then causes your local service station to raise the price of diesel and petrol at the bowser.. Unfortunately, you're the last link in the chain, and the price rise is passed the whole way along to you..

Following the outbreak of the war in Iran on February 28, and then disruption of oil through the Strait of Hormuz, Brent crude's price went from $72 a barrel the night before military action to $106 on March 20.. Australian petrol and diesel prices skyrocketed from an average of 168.1c/litre for 91 RON in NSW in February to 222.5c/litre by the end of March.   The federal government then stepped and cut the Fuel Excise, which ran from April 1 to August 2 and gave us a discount of 32c a litre.. The relief came at exactly the right time and sheltered us from the worst of the price hikes..

Brent crude's price during this time hit US$118.03 on April 29.. The price of 91 RON could have sailed past 250c/litre.. Which is where we are headed for now.  How much will the price of fuel rise?.

After falling back to a low of US$72.17 on July 1 Brent crude's price has risen again through September and October to US$117.35 on Monday this week.. The last time the price was this high was on April 29 when Brent crude peaked at US$118.03.  We are feeling early October's Brent price rise now with 91 RON averaging 237c/litre as the month draws to an end.  Early to mid-November could see us reach the highest fuel prices we've endured this year.. My guess is 91 RON will hit 250c/litre and the highest grade unleaded 98 RON will hit 280c/litre..

That's about $154 to fill up a car with a regular 55-litre petrol tank.. The good news is Australian fuel reserves have stayed at the same level since March.. According to the Federal government as of October 20 there remains 39 days left of petrol, 31 days left of diesel and 28 days left of jet fuel..

If you remember it was the threat of fuel rationing that caused people to start panic buying back in March.. And while this time around there doesn't seem to be the same sense of panic, the rising cost of fuel results in an increase in the price of goods and services, which is a hard pill to swallow for households after being hit by successive interest rate hikes.. I don't know about you, but EVs are looking more attractive..

So's the bus..