Petrol prices expected to soar above $2 a litre again

Petrol prices could hit $2.15 a litre in coming weeks as capital cities return to the top of their fuel cycles and the return of an excise tax kicks in.

Australia’s east coast cities are approaching the bottom of their fuel cycles, which means petrol prices are about to hit a floor before heading back up again.

The average retail price slid 0.7 cents last week, according to Australian Institute of Petroleum data.

The national weekly average across the major capital cities fell by 2.9 cents, to 183.2 cents per litre.

But wholesale petrol prices have ticked upward to $1.70 cents litre, up more than 13 cents from the week before.

Oil prices lifted sharply last week after petrol exporting countries decided to cut production in a bid to keep oil prices high as higher interest rates continue to cool demand.

CommSec economist Craig James said the end of fuel cycles and the return of the fuel excise tax – which shaved around 22 cents a litre at the pump – could see petrol reach $2.15 a litre in coming weeks.

“But the ready reckoner is that a ‘fair’ price for fuel is around $1.90 – with the wholesale price near $1.71 a litre and the gross retail margin for retailers near 15-20 cents a litre,” he said.

James also said higher fuel prices would flow through to higher inflation, which would keep pressure on the central bank to keep hiking rates.

Business performance remains resilient to headwinds, with turnover lifting across most industries.

Business turnover as measured by the national statistics bureau lifted across 12 of 13 listed industries.

Inflationary pressures likely fed into elevated turnover figures as higher prices.

ABS head of business indicators Kate Lamb said the transport, postal and warehousing industry saw the sharpest lift – up 8.2 per cent for the month – due to easing supply chain issues.

Information, media and telecommunications was the only industry to report a decline, falling by 0.4 per cent.

With news from AAP.