Oil prices plunged on Monday to an 18-year low, trading down 5.67 per cent to US$20 per barrel, as travel restrictions and lockdowns wipe out global demand.
At session lows, oil dropped down to US$19.27 - the lowest trade price since February 2002.
And it’s no surprise: strict lockdown measures have caused aircraft to be grounded, people to stay in their homes and factories to halt production.
This marks an over-60 per cent drop in prices since the beginning of the year.
What does this mean for petrol prices?
NRMA spokesperson Peter Khoury told Yahoo Finance Australians should be seeing prices drop to less than $1 per litre, and in fact closer to the 90 cents per litre (cpl) mark.
And while it normally takes around seven to 10 days for global oil price drops to translate to Australian motorists, that hasn’t been the case.
“We should be seeing much cheaper petrol here in Australia than we’ve seen in many years, but that hasn’t translated yet,” Khoury said.
“There are a number of locations around Australia that are way too high.”
Khoury said Adelaide is the only city where motorists are getting a good deal. “Adelaide has been the benchmark – the average here is around 90 cents per litre, and that’s where it should be.”
Other major cities have held onto their profit margins, however.
In Brisbane, the average is 125.6cpl, while Sydney is 120cpl.
Perth is at 100cpl, and Melbourne and Canberra are sitting at the 130cpl mark.
“Even though prices are falling, they are falling way too slowly in the middle of a global pandemic,” Khoury said.
“The price cycle in those cities is appalling, they have not fallen quickly enough or far enough.
“To be falling 1 or 2 cents per day, when we have 18-year lows globally, is just not good enough.”
ACCC cracks down on petrol price gouging
Earlier this month, Australia’s consumer watchdog said it would be closely monitoring retail petrol price movements to determine whether these falls in global oil prices are flowing through to consumers.
“Australian petrol prices are primarily determined by international crude oil and refined petrol prices. Therefore, a sustained decrease in these prices should lead, everything else being equal, to lower petrol prices at the bowser,” said Australian Competition and Consumer Commission chairman Rod Simms.
“At this time the Australian economy needs all the assistance it can get, and lower world oil prices are one of the few positives from current world events.”
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