‘It’s a rip-off’: How much you should be paying for petrol

Petrol prices have surged in Sydney and Melbourne in recent weeks, despite expectations that the coronavirus outbreak would lead to a fall in prices at the pump.

Petrol around much of Melbourne is now sitting at $1.73 a litre.

Chief economist at AMP Capital, Dr Shane Oliver, said it’s a “rip-off”.

Dr Oliver said prices should be sitting at around $1.30 a litre, given the price of oil.

“It’s a bit of a rip-off, the way the price cycles up and down. I struggle to explain it,” he told 3AW’s Neil Mitchell.

“If you go back a couple of weeks in Melbourne it looks like the average price was around $1.30, and then, of course, the last couple of weeks it pushed up towards that $1.70 mark.

“There’s no logical reason why we pushed up at a time when the coronavirus was depressing global demand for oil and actually pushing oil, and presumably petrol, prices down.

“You look at the traffic jam figures in China, they’ve virtually disappeared … that means a huge reduction in demand for oil globally and that affects us in Australia, and that should show up as lower petrol prices, but we haven’t really seen that.”

Dr Oliver said someone is raking in the cash as a result of inflated prices.

“The first inclination is to assume it’s the retailer, but it could also be the refiners doing it. It’s either one of those,” he said.

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