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Petrol prices set to rise

The falling Australian dollar means motorists will pay more for petrol, with prices expected to jump as much as 5 cents a litre in the next couple of weeks.

Petrol prices are currently at discount levels, but because the Australian dollar has lost 5 cents against the US dollar, since the start of this month, the cost of imported fuel is set to rise. The Singapore unleaded fuel price is up over $10 in the past fortnight, in Australian dollar terms, and is expected to flow through to Australian motorists shortly.

The Singapore benchmark price of petrol is the key price benchmark for Australia, with the majority of our petroleum coming from refineries in Asia. Caltex Australia Limited (ASX: CTX) and other petrol importers like Mobil, BP and Shell generally base their wholesale prices on Tapis crude oil, and Singapore refined petrol.

Shell Australia has an agreement with Coles – owned by Wesfarmers Limited (ASX: WES) to operate most of its service stations under the Coles Express banner, while Woolworths Limited (ASX: WOW) has a similar agreement with Caltex.

Over the past 12 weeks, average weekly petrol prices have fallen from over 150 cents per litre, to below 138 cents a litre, according to the Australian Institute of Petroleum. That is likely to change as the effect of the falling exchange rate filters through. It also hasn’t helped that US dollar prices for fuel have risen over the past month.

Foolish takeaway

As we’ve noted previously, some days of the week are consistently cheaper to buy fuel. That may become more important for motorists looking to save some dollars as petrol prices rise.

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