Crude Prices Fall but Refined Fuels Remain High Amid Refining Capacity Crunch
Global crude oil prices ended the week sharply lower due to improved Gulf export flows. However, refined-fuel prices did not follow suit, instead remaining elevated in Australia.
The Brent crude futures settled at US$89.31 per barrel on Friday, down more than 5%, while West Texas Intermediate (WTI) settled at US$83.40 per barrel, down over 4%. This decline in crude prices is attributed to increasing oil flows from the Gulf region.
Despite this improvement, refined-fuel prices continued to surge. The Australian Competition and Consumer Commission's (ACCC) latest report showed that dated Brent averaged around US$94 a barrel, while Singapore Mogas 95 and Gasoil 10 ppm averaged US$117 and US$160 per barrel, respectively.
The refining sector remains a key pressure point, with Russian gasoline production falling to about 70% of domestic consumption due to drone attacks on major refineries. This has led to a shortage of flexible refining capacity, further supporting higher refined-fuel prices.
Australia's fuel prices remain elevated, with average retail unleaded petrol and diesel prices increasing by 4.8 cents and 6.3 cents per litre, respectively, in the reporting week. The full fuel excise was restored on August 3, adding up to 18.8 cents per litre to tax.