Bowser prices at mercy of delicate shipping agreement
Everyone hopes gas prices will continue to fall, but no one is sure.
Australian motorists woke up on Saturday to news that Iran had reopened the disputed Strait of Hormuz.
But by the time the family soaped and hosed their car and stepped inside for coffee, Tehran was threatening to reimpose the restriction.
The United States said a convoy of oil tankers had crossed the key shipping channel for the first major shipment of supplies with Israel since Israel launched a war on Iran seven weeks ago.
But confusion arose late Saturday, Australian time, with reports that Iran had opened fire on a ship trying to pass.
Anthony Albanese was previously confident that a revival of maritime trade would be good news for Australian petrol and diesel prices.
Following an overnight summit of nearly 50 countries on Friday to support the ongoing Middle East ceasefire, he was at pains to emphasize that the agreement was fragile.
The clock is ticking for a cessation of hostilities, which could end on Wednesday.
“We want to see tensions eased, we want to see the Strait of Hormuz opened, and we want to see no privatization and no tolls,” the Prime Minister told reporters in Sydney.
“We want to see this fragile regulation approved and these ships able to pass.”
In Australia, bowser prices have fallen below $2.10 per litre, falling below $3 for diesel in major cities for the first time since February.
However, even if it continues, it may take time for consumers to feel the full impact of Hormuz’s reopening.
Markets remain volatile as recent declines in global oil prices translate into cheaper fuel, according to Peter Khoury, spokesman for the National Association of Highways and Motorists.
“Wholesale prices are falling and should continue to fall,” he told AAP.
“We focus on wholesale prices in Australia because this is the clearest indicator of what will happen at bowser.
“It takes approximately seven to 10 days for these drops in oil prices to be reflected in the Australian market.”
Delay aside, Mr Khoury is urging drivers to be careful, saying it is still unclear whether the cheaper fuel will last.
“Trying to predict what will happen in the Middle East is the quickest way to make a fool of yourself,” he added.
“We’re really careful not to get too ahead of ourselves but the direction has been in the right direction, it’s been positive and we really need that.”
Energy Minister Chris Bowen said Australia has 46 days of gasoline and 31 days of diesel reserves.
The number of fuel-free gas stations is also decreasing, and there are about 120 diesel-free stations across the country.
Rowan Lee, of the Australasian Convenience and Petroleum Marketers Association, told AAP the issue facing consumers was fuel price rather than supply.
Price pressures are expected to continue for at least the next six months, he said.
“This is truly uncharted territory, and that’s not to belittle it,” he said.
Energy Economics and Financial Analysis spokesman Kevin Morrison told ABC News that if peace holds, it could take up to six weeks for 80 percent of Australia’s affected oil to be brought back online.
“I don’t think we can expect cheaper oil prices in the foreseeable future,” he said.
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