Petrol price hike won’t go away anytime soon, NRMA says

There will be no reprieve for Aussie drivers paying more than $2 a litre for petrol as long as Russia continues its war against Ukraine, the NRMA said.

Spokesman Peter Khoury said the price drivers are paying at the bowser is unprecedented.

“In Australia, most capital cities by the end of this week or early next week will see two dollars a litre on average,” Khoury told AAP on Wednesday.

“That’s the first time it has ever happened. There’s really no end in sight,” he said.

“We’re struggling to be able to point to any factors globally that will provide any sort of short-term relief.”

The sizeable jump of Brent Crude to nearly $US130 ($A179) a barrel comes after President Joe Biden announced overnight a ban on US imports of Russian oil and gas, calling it a “blow to (Vladimir) Putin’s war machine”.

The ban is the latest in the broad economic sanctions placed on Russia, which is second largest exporter of oil globally.

In retaliation to these sanctions, however, Russia has threatened to push prices up to $US300 ($A414) a barrel by cutting supplies to Europe.

Related: Australia grain prices rise as Russian invasion disrupts global supplies

Prices at Australian petrol stations hovered around the $1.80 per litre mark before the February 25 invasion but have spiked to around $2.

“We have no control over this,” Khoury said.

He noted Australia, a significant oil producer and exporter, relies heavily on imports even though they do not come directly from Russia.

More than half of Australia’s refined products come from South Korea and Singapore, according to Shipping Australia – the peak industry body for shipping.

Khoury said the latest Russian invasion of Ukraine has just escalated the increases to a whole new level.

“They (petrol prices) have gone up about $US50 ($A69) a barrel this year alone,” he said.

Even though the US had taken the lead in sanctioning Russia, “many countries are reluctant to sanction Russian oil directly – for fear of harming consumers further through higher prices”.

However, there might be a silver lining “despite the near-term price pain for drivers”, he said.

“New oil production is still expected within the first half of the year. This should help bring crude and fuel prices down.”

Khoury said the immediate impacts will be felt as long as the conflict in Ukraine drags on.

“Unfortunately as long as Russia continues its aggressive war against Ukraine and with the impacts of sanctions as a result of that, these prices are going to be hanging around for a while”.

with AAP