Petrol prices up, but may settle soon - Breaking News - Business - Breaking News

Petrol is the same stuff as gasoline ... just for my US readers

Petrol prices up, but may settle soon -

Petrol prices are once again burning a hole in motorists' hip pockets, but prices at the bowser are expected to settle in a few weeks.
Pump prices recently hit their highest level in more than six months, with prices up by as much as 20 cents in some areas to about $1.30 a litre.
CommSec equities economist Martin Arnold said several factors led to the latest jump, but most of the increase was due to price rises by refiners amid a lack of supply.
"Refinery shutdowns and maintenance in the United States have reduced supplies of gasoline, and increased Chinese demand has also pushed prices higher," Mr Arnold said.
Refinery maintenance in the US is usually carried out twice a year to prepare for the different needs for the summer and winter months.
However, the shutdown of the Valero Energy refinery in Texas on February 16, due to a fire, has added to this season's drop in supply. The plant is not expected to begin partial operations until late April.
Mr Arnold said the lack of supply would most likely keep petrol prices high over the next week, but prices were expected to settle as refineries in the US came back on line.
"Barring any further complications and supply shortfalls, prices should start to move back down once supply moves back on stream," Mr Arnold said.
He said prices could settle at about $1.15 to $1.20 a litre.
"That seems to be a fairly stable level when oil and petrol is at more normal, stable levels," he said.
While part of the problem leading to the recent spike in petrol prices comes from higher refinery prices, the rising Singapore benchmark price of fuel - by which Australian fuel prices are based - has added to the overall higher cost of petrol.
On top of that, the weekly price cycle followed by many petrol retailers in Australia has added to the recent sharp hip-pocket pain felt by motorists.
"As nearly all motorists in Australia have become accustomed to seeing, the price of petrol in most states and in most weeks, goes up and down," BP spokesman Chandran Vigneswaran said.
He said the cycle was a product of intense competition between retailers to attract customers.
This cycle has added to the recent sharp rise in petrol prices. When it came time for retailers to lift their prices - in most cases this occurs on about Wednesday or Thursday - they largely had to catch up with the higher refinery charges.
Retailers drop prices to attract customers, Mr Vigneswaran said. But with those prices too low to sustain a profitable business, prices are then raised to offset the discounting.
"We need to maintain a profitable business," Mr Vigneswaran said. (We need to cover) "costs, whether it's transport costs or employment costs or electricity costs, or all the different costs that exist in order to run a petrol station."
Mr Vigneswaran said about 60 per cent of motorists took advantage of the price cycle, choosing to buy their petrol on the cheapest days of the week, in most cases a Monday or a Tuesday.
"Over time this is a phenomenon that Australian motorists understand pretty well," he said.
However, Mr Vigneswaran said the price cycle differed between capital cities and was different or, in some cases, non-existent in some regional areas.