Petrol prices to tumble further amid turmoil on global oil market

Petrol is particularly cheap at about $1.68 a litre for unleaded in Sydney, where retailers are at the bottom of their price cycle – the period over which they progressively discount their fuel by a few cents a day before rapidly raising them again.

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Despite reaching the bottom of the cycle, Khoury said sliding wholesale fuel prices mean petrol prices could still fall slightly lower this week.

Prices of $1.77 a litre for unleaded fuel in Brisbane and $1.73 in Adelaide are also set to fall after hitting their high point in their respective price cycles. Tuesday is expected to be the cheapest day of the week to fill up in Perth, at $1.65 a litre.

In Melbourne, however, average unleaded prices are coming off a higher-than-expected peak of their cycle at $1.99 a litre. While the city’s average petrol prices will soon begin to ease, any meaningful reduction in line with the sustained fall in oil prices may not be felt for at least another week or more.

The NRMA said Melburnians planning public-holiday road trips would be wise to “fill up outside the city” if possible because prices were likely to be lower regionally.

Across the world, oil prices are under pressure after the Trump administration imposed sweeping tariffs on dozens of key trading partners, intensifying investor fears of an all-out trade war between the US and China and increasing the odds of recession.

Oil markets are also reeling from a surprise move by the Saudi Arabia-led cartel of oil-producing nations to increase output from May. The global crude oil benchmark Brent has collapsed from nearly $US75 ($119) a barrel to below $US65 ($103) this month.

While delivering some welcome relief for motorists, the threat of a prolonged oil price rout could lead to a return to tougher times for Australia’s $70 billion oil and gas industry, and potentially force producers to cut back spending and slow drilling.

Last week, analysts at investment bank UBS slashed their oil price forecasts on expectations that trade tensions and slower global growth would subdue oil demand just as the oil producers’ cartel and its allies, known as OPEC+, accelerated production increases.

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“Brent prices have dropped to the low-mid $60s since the start of the month, and while our base is around this level for the rest of the year, we expect significant volatility,” UBS analyst Tom Allen said.

“We recognise the landscape remains fluid and further escalation of trade tensions – between the US and China in particular – could still see larger impacts to global growth.”