Fuel prices continue to soar

We have been discussing for some months now the worldwide shortage of crude oil supply & the potential consequences that could play out in the Australian & global market. Exacerbating the situation even further has been the fall out from Russia invading Ukraine. Brent crude rose 9.9% over the weekend to USD129.78 per barrel, while US West Texas Intermediate (WTI) crude rose 9.4% to USD126.51 per barrel, putting both contracts on track for their highest daily percentage gains since May 2020.

Unfortunately, soaring oil prices look increasingly likely to convert to bowser prices reaching close to or above $2.00 per litre (AUD) for the medium term. It is a very volatile situation in Europe with consequences extending beyond the fuel industry and being felt around global markets.

The sharp ongoing increases have seen many companies, such as Australia Post, apply preemptive fuel surcharges in order to cover the expected increase in fuel cost to its business. The point at which these costs may be absorbed by businesses has been well and truly passed and the end consumer now poised to bear the brunt.