Petrol prices are continuing their free fall as a result of the increased competition and the global oversupply, with some retailers selling the fuel at the lowest price in five years, ABC has reported.
A strengthening US dollar and concerns about the Eurozone have also contributed to the dramatic fall of prices, causing West Texas intermediate crude oil to dip another 4% to $US47.93 a barrel, its lowest level in several years overnight.
A spokesman for Motoring group NRMA said the international conditions making prices lower at the bowser was welcome news for motorists.
“What we’ve seen basically and we haven’t seen this for a very long time is oversupply. The United States has increased production consistently now for some time,” the spokesman said.
“Saudi Arabia is trying to match that by maintaining its levels of production. So you’ve got more oil on the market than what we’re using. As a result prices are low and they’re low in time for the holidays which is great news. “
According to The Guardian, lower oil prices will lead to higher disposable incomes and cut business costs, but stock markets believe the slide from a peak of $115 a barrel last summer reflects the slowdown in China, recession in Japan and looming deflation in the Eurozone.
However, the NRMA spokesman said motorists should expect relief to the bowser for weeks to come.
“We expect the prices to continue to fall. The average price in Sydney right now is $1.12 and we think there’s at least two or three cents a litre that could be shaved off that,” he said.
“There’s nothing internationally to suggest that prices are going to suddenly turn. Certainly in the next two or three weeks we expect these prices to continue. It’s a very volatile industry and it’s very difficult to predict beyond that.”
