Petrol prices in Australia will remain unpredictable in 2023 as global events continue to weigh on the cost of oil, with experts concerned mitigating price hikes is out of the government’s control.
The cost of unleaded petrol hit a record high of over $2.20 a litre in June this year.
The former government tried to intervene by cutting the fuel excise but it did little to bring petrol prices down, and now there are concerns further government intervention will not be able to calm unstable costs at the bowser in 2023
”The factors that determine whether prices will go up or down are global and are increasingly out of the control of any government,” NRMA spokesperson Peter Khoury told 9news.com.au.
“We have seen oil prices heading in the right direction but we’ve been fooled before.”
What happened in 2022?
Petrol prices reached record-breaking highs both for unleaded and diesel this year.
The main factors leading to volatile fuel prices include the hangover from the COVID-19 pandemic, Russia’s war, lockdowns and unrest in China, along with speculation of a looming recession.
“On top of all that, you have OPEC and other oil-producing countries putting an artificial lid on production to inflate the price of the barrel,” Khoury said.
Khoury said 2022 has been an absolute “nightmare” in giving Australians reliable advice.
“It was a time when we never needed reliable advice more as we broke every record,” Khoury said.
Diesel prices were at a historic peak all year, but by December, international oil prices plummeted by half meaning fuel prices dropped to below $1.60 across Australia.
Khoury said fuel prices dropped to a price not seen in almost six months at the end of 2022.
What was the fuel excise?
Surging petrol prices only added to the stress on Australians facing surging inflation impact the price of everyday items, consecutive interest rate hikes, and skyrocketing energy prices.
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The fuel excise was chopped in half from 44.2 cents per litre to 22.1 cents per litre.
In real word terms, this allowed motorists filling up a 40-litre tank to save about $10.
The cost of living relief ran until September 28.
The Albanese government didn’t offer any cost of living sweeteners in their October budget but said it plans to offer power price relief in the new year.
What’s going to happen in 2023?
The takeaway message from experts is that it’s impossible to tell, but even if the government did try to intervene, it’s unlikely measures would make a difference in terms of petrol costing.
However, the government may focus on trying to reduce the cost of living in other ways.
Khoury said any change in global factors could have “an immediate effect on oil prices”.
“OPEC could cut prices even further, Russia’s appalling invasion could escalate or deescalate overnight you just can’t know,” he said.
“There’s still genuine fears about the economy and if the economy crashed there would be downward pressure on prices.”
Khoury said the “fundamental challenge” in 2022 was the difficulty in forecasting what was going to happen with petrol prices and giving Australians the most reliable advice.
“It’s just impossible to predict,” he said.
Authorities aren’t confident predicting what could happen to petrol prices between Christmas and the new year let alone well into 2023.
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