Fuel prices unlikely to tank in hurry despite ceasefire
Drivers may have to wait months for fuel prices to drop even though the United States and Iran have agreed to a pause in hostilities that would include reopening the Strait of Hormuz.
In exchange for a two-week delay in American strikes, Iran agreed to allow tankers to pass through the critical waterway, which carried about a fifth of the world’s oil before the war.
Australian petrol and diesel prices are unlikely to react immediately, with America’s benchmark Brent Crude oil falling 13 per cent to around US$95 per barrel, experts and industry insiders told AAP.
Malcolm Roberts, president of the Australian Petroleum Institute, which represents major oil companies such as Ampol, BP, Mobil and Viva Energy, said the ceasefire was welcome but it would take some time for its effects to be reflected in supply chains.
“We caution people not to expect this to have an immediate impact on supply or prices in our area,” he said.
“It will take some time for global supply chains to reconnect.”
US President Donald Trump claimed “complete and complete victory” and declared it a “great day” for world peace, but Energy Secretary Chris Bowen struck a cautious tone on reopening the Strait of Hormuz, warning it did not appear to be a done deal.
“We welcome the progress, but I don’t think we can say the Strait of Hormuz is open anymore,” he told reporters in Sydney on Wednesday.
“There’s more work to be done.”
Australian National University supply chain lecturer David Leaney said if the ceasefire continued, petrol and diesel prices were likely to start falling in the coming months as fuel companies sold off their more expensive fuel.
“This cost (of gasoline and diesel) remains high for several months as this expensive oil travels around the world and is converted into fuel at higher costs,” he said.
NRMA spokesman Peter Khoury said the organization would be monitoring closely to ensure falling wholesale prices were fully reflected.
“Australians have been paying the highest price in history for more than a month. We need to provide relief to family budgets again,” he said in a statement on Wednesday.
Prime Minister Anthony Albanese had a telephone conversation with His Majesty the Sultan of Brunei on Wednesday, discussing the importance of keeping global energy supply chains open.
As Mr Albanese prepares to travel to Singapore on Thursday for talks aimed at further increasing Australia’s fuel supply, the opposition has called for a public database showing how much petrol and diesel the country has in its reserves.
Opposition Leader Angus Taylor will call on the government to introduce a public dashboard that will provide information on fuel-free service stations, days of remaining stock and available storage.
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