Each week the Australian Institute of Petroleum publishes fuel price data to show the movements in retail and wholesale prices. When you look at these changes over a year, it paints an interesting picture of how pump prices change with a global pricing model.
In 2022, the average national pump price for diesel was $2.07 per litre which was 45% higher than 2021 at $1.43 per litre. The increase was consistent across all states though Western Australia was slightly lower averaging $2.03 per litre in 2022.
This was the highest average price for a calendar year since the records started for diesel in 2007 and a significant gap from the lowest average in 2016 of $1.18 per litre.
Historically the national average for unleaded and diesel have risen and fallen together though the gap hasn’t been significant. In 2022, the national average pump price of unleaded petrol was $1.84 per litre which represents a 13% difference. The last time there was a double digit gap between petrol and diesel was in 2008 when the Global Financial Crises (GFC) hit; diesel averaged $1.62 per litre over the year; and diesel was 14% more per litre than unleaded.
With such a large increase, the costs have been passed on to consumers via the fuel price escalators found in many logistics and supply contracts. Any goods which are transported (so everything) would have seen a percentage of the retail prices increased to reflect the rising diesel prices.
If prices decline, like they did after the GFC, it should ease the pressure on inflation and allow households to breathe again.
