Fed: Petrol prices should stabilise soon: CommSec
16 Feb 2009 3:08 PM
CANBERRA, Feb 16 AAP - Petrol prices are likely to stabilise after a rapid rise during the past five weeks, but they are unlikely to return to $1 a litre anytime soon, a leading economist says.
The latest data from the Australian Institute of Petroleum shows the average national price rose 1.8 cents per litre in the past week to a two-month high of $120.9 cents.
This was despite the US oil price recently falling to its lowest level in five years.
"Understandably, motorists have been somewhat perplexed at the trends," Commonwealth Securities chief economist Craig James said.
This was a reflection of a glut of oil developing in the US because of weak economic conditions, while the benchmark price - Tapis crude - for Australia has been driven up by "better behaved" supply and demand in the Asian region.
"While it's not uncommon for these regional discrepancies to occur, the gap between Malaysian Tapis and US Nymex is historically wide," he said.
"The good news is that gap has narrowed over the past few days."
That doesn't mean pump prices will fall to a $1 a litre soon, but prices could start flattening, Mr James said.
CommSec expects the petrol price to stabilise around $1.20-$1.25 a litre.
