Anyone who drives a diesel knows pump prices are currently at or near record highs, averaging around $2.30 per liter across the east coast.
Queensland’s RACQ Motor Club offers some bad news today – namely, prices will rise before falling.
The club attributed international factors and soaring demand, not to rampant chipping from service stations and other suppliers, but added that tight retail margins could may lead to an increase.
RACQ spokeswoman Lauren Cooney stated: “There is a misconception that fuel companies are overcharging motorists of diesel-powered cars, but in reality, sales margins are reasonably low retail.
“For example, the current average retail margin for diesel sold in Brisbane is 9.5 cents/litre, typically around 12 cents/litre.”
Ms Cooney added that exceptionally high diesel prices are taking place around the world.
“Russia is a major producer and distributor of diesel oil, especially to the European market. With the ongoing war in Ukraine and sanctions on Russian exports, the global supply of diesel has dropped significantly, causing wholesale prices to rise and remain unbelievably high,” she added.
When you think beyond personal transportation, the demand for diesel is much higher than the demand for unleaded. That said, Australia’s two best-selling vehicles are diesel vehicles Toyota Hilux and Ford Ranger.
Ms Cooney said: “Diesel is an industrial fuel and is used more than unleaded, for example in Queensland we consume more than twice as much diesel as we use petrol.
“The cost of producing diesel is similar to unleaded and both products are processed similarly. It’s the supply and demand factors that are driving prices up, rather than the cost of production.
“The current average wholesale diesel price in Brisbane is 226cpl, about 50 cents higher than the unleaded wholesale price of 175cpl. In normal times, the domestic wholesale prices and the international benchmark prices for diesel and unleaded will be very similar, usually by no more than a few cents.
“With current retail margins on diesel low, the bad news is that prices are likely to continue to move slightly higher.”
