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Motorists across Australia should brace themselves for rising petrol prices amid a global oil supply crunch and ongoing military tensions in Ukraine.

Fuel prices have increased more than 30 per cent in the past 12 months, the strongest annual rise since 1990, and comes as Australia records its biggest rise in inflation since 2014 on Tuesday.

During the height of the Covid-19 pandemic fuel makers put the brakes on supplies and now the price is revving up again as things get back to normal.

KPMG chief economist Brendan Rynne confirmed Australia’s petrol prices were likely to remain high for some time as rises in international oil prices took at least a fortnight to flow back onto the consumer.

‘When you get an increase in the price of oil, it gets passed through to every business and every consumer – that’s why price increases in oil act like an increase in taxes,’ he said.

Motorists across Australia should brace themselves for the price of fuel rising (pictured, a service station in Melbourne)

Motorists across Australia should brace themselves for the price of fuel rising (pictured, a service station in Melbourne)

Motorists across Australia should brace themselves for the price of fuel rising (pictured, a service station in Melbourne)

Fuel prices have increased more than 30 per cent in the past 12 months, the strongest annual rise since 1990 (pictured, a petrol bowser in Sydney)

Fuel prices have increased more than 30 per cent in the past 12 months, the strongest annual rise since 1990 (pictured, a petrol bowser in Sydney)

Fuel prices have increased more than 30 per cent in the past 12 months, the strongest annual rise since 1990 (pictured, a petrol bowser in Sydney)

The longer the price spike is maintained, Dr Rynne added, the ‘more entrenched the feeling of inflation becomes at the consumer level and business level’, the Sydney Morning Herald reported. 

Nationwide, the average price of unleaded petrol has climbed 15 per cent since July  to $1.70 a litre, and in Sydney, some petrol stations were charging as much as $1.75 at the bowser on Australia Day. 

However, NRMA spokesperson Peter Khoury was quick to dismiss speculation that bowser prices could eventually increase to as much as $3 a litre.

‘It would take a catastrophic turn of events for that to happen,’ he told Daily Mail Australia.

‘However, you never say never and oil is a volatile market. We have seen as much as $2 in some parts, especially in Sydney last year and in recent weeks, but $3 per litre… let’s hope not.’  

In Sydney, some petrol stations were charging as much as $1.75 at the bowser on Australia Day.

And recent monitoring by the NRMA showed nearly 40 per cent of Sydney petrol stations had pump prices above $1.80 a litre pre January 26.

Hobart’s average price has hit a staggering $1.81, while in Brisbane it costs $1.76 and Melbourne $1.62. 

‘We have been paying record prices across the country,’ Khoury said.

Petrol prices in Australian capital cities are determined by the size of the market, location and the degree of competition. 

Across the Tasman, many residents are already preparing for the expected price spike of up to $3 a litre when filling up their cars.

The average price of unleaded 91 across the ditch is $2.54 and that has seen demand for hybrid and electric vehicles (EV) surge.

‘An EV in terms of electricity usage, is the equivalent of about 30 or 35 cents a litre. So if you’re talking petrol being about two $2.82 or $2.90, maybe even $3, you’re talking a difference of about $3.30 so one-tenth of the cost that’s hitting your back pocket,’ explained Drive Electric director Dean Sheed. 

Petrol prices in Australian capital cities are determined by the size of the market, location and the degree of competition (pictured, a Caltex service station in Melbourne)

Petrol prices in Australian capital cities are determined by the size of the market, location and the degree of competition (pictured, a Caltex service station in Melbourne)

Petrol prices in Australian capital cities are determined by the size of the market, location and the degree of competition (pictured, a Caltex service station in Melbourne)

Demand for hybrid model vehicles has skyrocketed in recent years in New Zealand as people seek an alternative to paying astronomical prices for petrol

Demand for hybrid model vehicles has skyrocketed in recent years in New Zealand as people seek an alternative to paying astronomical prices for petrol

Demand for hybrid model vehicles has skyrocketed in recent years in New Zealand as people seek an alternative to paying astronomical prices for petrol

Source: DailyMail

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