Experts predict petrol prices are about to rise across Melbourne

A call to action has been issued to motorists, with experts predicting a big change to the price of fuel in Melbourne.

Motorists are being urged to fill up with petrol with the price of fuel in Melbourne likely to rise in the coming days.

The average price of unleaded in the city has not been this cheap since the end of November - but experts say more expensive fuel is on the way.

The current average in Melbourne is 115.6cpl with the most common price being 114.9cpl.

RACV Senior Engineer Nicholas Platt said fuel prices had been trending down.

“In regional area prices vary, however since wholesale prices are relatively low at about 109cpl many places have cheap fuel at the moment since they tend to follow the wholesale price,” Mr Platt said.

He expected prices would start rising within the next week in Melbourne.

“Fuel prices in Melbourne are typically cyclical with a rapid rise in prices followed by a gradual discounting in prices as fuel outlets under cut each other. Post-lockdown Melbourne prices have returned to this pattern.”

A fuel price cycle is usually about four to six weeks - but during lockdown the cycle virtually stopped.

Prices are expected to start rising within the next week in Melbourne.

Mr Platt’s advice was to motorists was to fill up soon to beat the price rises.

“Now is a good time for consumers to fill up,” he told the Herald Sun.

A number of independent outlets in and around the south eastern suburb of Lyndhurst were currently selling fuel for less than $1 per litre, he said.

“In regional areas, Ballarat consistently has some of the cheapest fuel in the state.”

The fluctuation in prices was the result of competition.

“Generally speaking it is the large number of fuel outlets competing that drives the fuel price cycle seen in metro areas but it is also the number of independents in an area that sets how quickly they reduce prices. In addition the wholesale price drive the underlying trend. This may not be so apparent in metro areas where it is masked by the price cycle. However in areas with a reasonably large market such as Ballarat, retailers will follow the wholesale price, with a margin very closely.”

According to comparison website Compare The Market, Melbourne regularly ranks as one of the more expensive capitals to fill up .

Their analysis of quarterly figures found the most economical petrol in Melbourne was found in suburbs southeast of the CBD. Motorists in the Greensborough/Ivanhoe areas and in the northeast usually pay more at the pump.

A spokesman for the Australian Competition and Consumer Commission [ACCC] said the recent decision by Saudi Arabia to cut crude oil production led to an increase in international crude oil prices, which was likely to flow through to retail petrol prices in Australia.

“The extent to which it does so will depend on movements in the AUD-USD exchange rate and the international market for refined petrol.”

He said The ACCC kept a close watch on Australia’s petrol market to determine if reductions in international prices were being passed onto consumers. “When necessary, we publicly identify major fuel retailers that are not passing on reductions.”