The price boards outside Illawarra petrol stations have been looking scary for the past few weeks.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
Premium unleaded varieties have broken through the $2-a-litre barrier in many servos, with regular unleaded sitting just under that in some places.
Regular unleaded is the barometer used to monitor petrol prices and in the Illawarra there was a massive 30-cent a litre gap between the cheapest and most expensive.
On Thursday morning the highest price was 199.9 cents a litre while the lowest was 169.9 at Windang.
If you're filling up a car with a 60-litre tank, that price gap equates to a difference of $18.
The NRMA's John Macgowan said prices for the high-octane fuels had already crossed the $2-a-litre mark but regular unleaded wasn't tipped to cross that barrier - at least in the short term.
"The most concerning things for regions right now is diesel," Mr Macgowan said.
"Even in the worst supply shortages we consistently saw diesel prices lower than regular unleaded and now we're seeing diesel prices consistently higher than regular unleaded.
"That's a major issue that we're not sure what anyone's going to do about it yet."
Mr Macgowan said the current price rises weren't due to the tensions between Russia and the Ukraine but rather a better than expected economic situation as the world gets back into gear after the COVID crisis.
"As the world is coming out of protracted COVID lockdowns we're seeing demand for fuel spike and supply, as a result of tightening of rules at OPEC as well as conflict in the Middle East, hasn't been able to keep up with demand," he said.
"That's the fundamental reason why we're seeing higher than average prices and why they keep going up."
The problem is exacerbated in regional areas where there are fewer petrol stations and the lack of competition creates less incentive to adjust prices.
Mr Macgowan said the Russia-Ukraine war could have an effect on petrol prices if the US introduced sanctions, which would see Russia's 5 million barrels a day removed from the global supply pool.
There are other issues that could ease pressure on fuel prices, including negotiations with the US, France, United Kingdom and Iran over a nuclear disarmament deal.
He said if that came through then around a million barrels of Iranian oil a day could come back on the market.
Also, if the US Federal Reserve raised interest rates higher than expected, that would result in a reduction in US demand, which would stablise prices.
The Illawarra Mercury newsroom is funded by our readers. You can subscribe to support our journalism here.
Sign up for breaking news emails below ...
Glen Humphries
I'm an award-winning senior journalist with the Illawarra Mercury and have well over two decades' worth of experience in newspapers. I cover the three local councils in the Illawarra for the Mercury, state and federal politics, as well as writing for the TV guide. If I'm not writing, I'm reading.
I'm an award-winning senior journalist with the Illawarra Mercury and have well over two decades' worth of experience in newspapers. I cover the three local councils in the Illawarra for the Mercury, state and federal politics, as well as writing for the TV guide. If I'm not writing, I'm reading.
