Petrol at its cheapest so far this year

theadvertiser.news.com.au 4may03

PETROL prices are tipped to drop under 80c a litre this week for the first time in seven months.

Unleaded fuel yesterday was down as low as 82.3c, the cheapest since November. This is more than 15c a litre cheaper than the 97.9c peak charged on the eve of Easter a little more than a fortnight ago.

The fall represents a saving of about $9 on filling up a typical family sedan.

The savings could grow, according to experts.

"It is quite possible, at the bottom of the discounting cycle, prices will fall below the 80c mark," RAA spokeswoman Wendy Bevan said.

A combination of factors had pushed petrol prices down in recent weeks, Ms Bevan said.

These included:

 CERTAINTY of oil supply, following the ending of the Iraq war.

 THE end of strikes in Venezuela and a return to full production there.

 A 12.5 per cent increase in the value of the Australian dollar against the US dollar in the past six months.

On Friday the Australian dollar was at US63.15c, the highest level in three years. These factors had combined to force the wholesale price down 2c a litre last week, with the savings expected to be passed on to the petrol pump from tomorrow.

"This is welcome news for motorists," Ms Bevan said.

"The oil market is now confident that there is a plentiful, if not over-supply of oil for the short-term.

"The last time the price of crude oil was around $US25 a barrel was November and pump prices went as low as 78.9c a litre. The Australian dollar, however, was not as strong against the US dollar then so it is certainly possible for prices to fall below 80c again."

Motor Trade Association executive director Ian Horne agreed.

"With all the factors in place, there is no reason why unleaded fuel prices couldn't fall below 80c," he said.

"How long they would stay that low, however, is another thing."