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Costly Christmas petrol prices for Australians

Christmas petrol snow

Ho! Oh! No! Fuel prices flying north.

In an attempt to quell record levels of oversupply, the world's largest oil-producing countries have agreed to cap outputs, driving up barrel prices and, according to experts, the retail cost of fuel at the bowser.

The Organisation of the Petroleum Exporting Countries (OPEC), responsible for approximately one-third of the globe's oil production, decided to restrict total exports to 32.5 million barrels per day, about 1.2 million barrels less than the current output.

The Daily Telegraph reports these actions may lead to increased fuel prices for Australian motorists, with experts estimating petrol prices to rise up to 8c per litre.

Oil prices have fallen dramatically over the past decade, from US$146 a barrel in 2008 to record low levels of US$30 per barrel at the beginning of 2016.

In August, the ACCC revealed that average Aussie petrol prices were at their lowest levels since 2002.

The latest report on petrol prices shows a continuing drop in prices at the pump during the last quarter.

However, once the OPEC deal was announced, crude oil prices rose 9% to a little over US$50 a barrel.

NRMA spokesperson Peter Khoury said motorists can expect to fork out around 8c a litre more for petrol.

"Forecasters are suggesting we are looking at an 8-14% increase in the price of oil, which possibly means an increase of 6c to 8c a litre (at the bowser),” he said.

CommSec's Savanth Sebastian also warned fuel prices would likely rise in the lead up to the holidays.

"The days of $1 fuel are certainly over... essentially around Christmas is when you will see the impact from these price increases," he said.

Want to be rewarded for fuelling up your car? Consider a petrol rewards credit card.

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