Why Australia is seeing fuel prices increase, despite demand dropping

Aussies are spending more at the bowser as fuel prices rise across the nation

Cuts in oil production by the OPEC cartel and other big producers combined with demand rising in other countries has meant Australia has copped the rise in fuel prices.

Despite the demand for petrol dropping in Australia, prices are right now at the highest level pre-COVID.

The average price of fuel rises to in every major city

Average prices for regular unleaded petrol reached 164.7 per litre during the past week in Sydney with prices at some of the major service stations as high as 175.9 cents per litre.

The average price of a litre of petrol this week is 165.7 cents in Perth, 159.6 cents in Melbourne, 146.9 cents in Darwin, 149.9 cents in Hobart, 136.4 cents in Adelaide and 150.6 cents in Canberra.

Crude oil prices are to blame

A report released by the ACCC has reported the higher petrol prices were due to rising international crude oil prices that were above the inflation-adjusted 40-year average of $61 USD per barrel for the first time since December 2019.

ACCC Chairman Rod Sims stated that crude oil supply from the Organisation of the Petroleum Exporting Countries was responsible for the higher petrol prices.

Despite not returning to pre-COVID levels the petrol demand recovered over towards the end of 2020 but dropped off again in the March quarter as restrictions remerged.