Here's everything that's cheaper than petrol right now

Fuel. In this economy?

Artwork: Emilia Tortorella

Fuel. In this economy?

Fuel is creeping back above $2 per litre in many capital cities and looks like it'll be staying there as head honchos of the EU have moved to ban most oil imports from Russia.

The deal was struck in order to cut off some of the revenue streams of Russia's president Vladmir Putin and put a kink in the hose of the funds that are funding his war in Ukraine.

Tonight #EUCO agreed a sixth package of sanctions.

It will allow a ban on oil imports from #Russia.

The sanctions will immediately impact 75% of Russian oil imports. And by the end of the year, 90% of the Russian oil imported in Europe will be banned. pic.twitter.com/uVoVI519v8

— Charles Michel (@eucopresident) May 30, 2022

So what's going on?

Expect for more "pain at the pump". Even though the former federal government cut the fuel excise (basically fuel tax) in half in late March after prices peaked at about $2.20 per litre. Fuel prices fell majorly about a week later. But nine weeks later, on Tuesday, the NSW average is $2.16 per litre and the national average is (a stubborn) $2 per litre.

You won't get much change out of $100 when you fill up your car these days, meaning fuel is more like a luxury item these days.

Some things that are cheaper than a tank of unleaded, (the E91 kind not even "premium"), include:

• Two bottles of fancy Moët & Chandon champagne
• A breakfast for four adults at a cafe that's popular on Instagram
• A one-way flight from Sydney to Melbourne
• 100 chocolate bars - that aren't past their "best before" date

How much does it cost to fill up right now?

If you filled up your car with petrol in the week leading up to May 22, it would have cost you on average about 199.1 cents/litre, nationally, according to the Australian Institute of Petroleum.

In Sydney, the weekly average petrol price was 203.8 cents per litre, in Melbourne it was 205.5 cents per litre and in Brisbane 206.9 cents per litre.

Regionally, fuel prices hit a weekly average of 193.1 cents per litre.

If you're filling up with P98 in NSW today, it would cost you about 216.3 cents per litre.

If you use Ethanol 94 or Unleaded 91, it will set you back 201.4 cents per litre, while diesel cost 209.8 cents per litre on average on Tuesday.

Why is everything so expensive again?

The Morrison Government's cuts to the fuel excise reduced the price of petrol at the bowser by about 22 cents, but this doesn't change the actual price of crude oil. 

So, the current petrol price hike is all part of an upwards-creep in fuel prices that's been happening since 2021, University of Sydney Economics Professor Nicolas de Roos said.

Since the price of oil is set on international markets and quoted in American dollars, we are at the whim of those markets and the US-Australian exchange rate. 

The biggest disruptor of these international markets is the war in Ukraine and sanctions on Russia and their oil. This has had a big effect on international crude oil prices, which trickles down to the consumer. 

Also, local petrol stations like BP, AMPOL or Coles set different retail prices for fuel, which vary a lot from day to day.

These retail prices work in "cycles" where "prices do jump dramatically, very quickly, and then gradually come down ... It's possible that we've recently had a jump," Prof de Roos said.

With these retail cycles, it is likely prices will drop in the next four to six weeks.

Will petrol prices continue to go up?

Director of the Melbourne Energy Institute at UniMelb, Professor Michael Brear said he'd "be surprised if prices at the pump go up further than they are now". 

"At around these kinds of prices that we're seeing at the moment tends to be when prices fall back. And that's just a simple supply and demand thing. There'd be such good money to be made selling oil at this kind of price their production ramps up to meet it," he said. 

Can the government do anything about the price of fuel?

Not really. All the Government can do is cut or remove the taxes on fuel, which they've already done.

Experts say it is difficult to forecast what fuel prices will look like on September 28 when the fuel excise returns in full and prices increase by 22 cents. 

Some are urging the new Albanese government to extend the cuts to the fuel excise. Something that could (but probably won't) happen when the new Treasurer Jim Chalmers hands down another Budget later this year.

But last week, during the election campaign, Chalmers told Nine's Today Show "it will be difficult to find the billions of dollars that it would cost to extend that forever".

Will we stop driving?

"At $2 per litre, I think a lot of people will already be thinking about how to use less fuel," Prof Brear said.

"If you've got good public transport, or if you can ride a bicycle to work because it's a few kilometres away, then I think a lot of people will be switching to other ways of commuting, getting to school and work and doing the shopping."