Diesel prices Australia: Bowser relief after global oil prices fall for farmers, motorists

Farmers and motorists could see some relief at the bowser after benchmark global oil prices eased over the past week.

On Wednesday, Brent Crude, the international benchmark, extended a week-long fall to $US98.50 a barrel. US West Texas Intermediate dropped 2 per cent to $US90.60 a barrel, taking its retreat to more than 6 per cent this week.

Prices fell sharply to start the week after US President Trump indicated he was open to diplomacy with Iran. On Wednesday morning the falls extended on news agency reports that Tehran had offered to reopen the Strait of Hormuz within seven days if the US agrees to halt its military blockade.

Prices fall in past week

Peter Khoury, a spokesperson for the National Roads and Motorists’ Association (NRMA) said diesel prices at service stations had already been falling over the week to September 21.

“The national average for diesel right now is just under $2.80 a litre the wholesale price is about 5 cents less than that,” said Mr Khoury.

“We’ve noticed that gas oil which is the international [diesel] benchmark for our region has dropped about $US18 a barrel over the last week. It was at $US200 a barrel and has fallen a bit which is positive and if that is sustained we might see some relief at the bowser for diesel.”

In May, Leah Weckert the chief executive of Coles warned that some farmers wanted to charge higher prices for meats, fruit, vegetables, and dairy to cover their rising costs.

Since the Middle East conflict erupted in early February the fuel-price shock has hit farmers twice, with the cost of operating machinery such as tractors rising alongside road haulage and packaging costs.

“The Middle East and Ukraine are increasingly diesel conflicts,” said Mr Khoury.

“Diesel prices have jumped significantly higher than unleaded (petrol) prices this year. We just saw another big jump early last week when a second front opened up between the Houthis in Yemen and Saudis, but things have stabilised and fallen a little since.”

Analysts do not expect a sustained fall in diesel prices without sudden ends to the wars in Ukraine and the Middle East.

On Tuesday, the Commodity Strategy Team at investment bank RBC Capital said refiners were now selling diesel at record profit margins due to tight supply versus strong global demand.

“While the US has been a critical supplier to bridge global gaps, especially for Europe and South America, US refiners are already running near maximum rates,” RBC said.

“While the White House has discussed capacity-boosting efforts, we think industry will be reluctant to undertake major investment unless it is convinced this represents a long term structural change to the global refinery market.”

High petrol prices

On Wednesday, prices for Premium Unleaded petrol at Randwick in Sydney’s eastern suburbs topped $2.70 a litre at Shell, 7-Eleven and Ampol service stations.

Unleaded 91 averaged $2.41 a litre across the Sydney’s eastern suburbs, according to the FuelCheck app.

The high prices are adding to inflationary price pressures in the economy, with traders lifting bets that the Reserve Bank will lift interest rates at its September 29 meeting.

ANZ Bank’s economics team now expect two more cash rate increases this year in September and on Melbourne Cup Day in November.

Over the week to Tuesday, the ANZ -Roy Morgan consumer confidence survey fell 1.9 points to 72 points. Confidence about the economy and personal financial conditions in 2026 has fallen to its lowest levels since the peak of the coronavirus crisis in 2020.

“War in the Middle East and Ukraine is kind of the new normal now unfortunately,” said Mr Khoury.

“As long as both conflicts continue we’re unlikely to see a sustained drop in bowser prices.”