Why Australians are facing record petrol prices

Australians have been warned they may face record high petrol prices for weeks due to global oil supply shortages and tension between Russia and Ukraine.

Australia recorded its biggest jump in inflation since 2014 yesterday, which was largely driven by an annual petrol price rise of 32.3 per cent.

Chief economist at KPMG, Dr Brendan Rynne, says a slight oil underproduction is the main factor.

“OPEC, while they’ve nominated that they were going to produce a certain amount of barrels per day, are slightly underproducing that and with world demand for oil continuing to rise we’re jus getting a bit of an imbalance between the supply of oil that the world wants and what’s actually being produced,” he told Ross and Russel.

“At the moment, because it’s just at the margins, it’s still having an effect on world oil prices.”

Dr Rynne says tensions between Russia and Ukraine are also fuelling price hikes.

“It’s just adding to the uncertainty about what’s actually going to be happening with the supply of oil,” he said.

Press PLAY below to hear more about predicted petrol price hikes