Petrol tipped to hit 85 cents
Petrol could plunge to as low as 85� a litre, according to one WA motoring body, as the main global oil benchmark price drops below $US50 a barrel.
Bowser prices in Perth have continued to fall after reaching a five-year low last week, with motorists today paying 106.7� a litre for the cheapest unleaded fuel, according to FuelWatch.
With no sign the slide will stop any time soon, WA Motor Trade Association chief executive Stephen Moir said petrol prices could go below $1 and hit their lowest level in 15 years.
Mr Moir said the oil industry was looking at a perfect storm as countries kept up or even increased production, putting a price of $30 a barrel in the ball park if the trend continued.
"We're looking at a return to the prices we haven't seen since the late 90s," he said.
"You could be paying 85¢ to 90¢ a litre."
The Royal Automobile Club said it was reasonable for West Australians to expect petrol prices to continue falling as the oil price dropped but cautioned it would eventually hit a floor.
"Petrol prices of below $1 per litre are not out of the question," manager vehicles and fuel Alex Forrest said.
"That would make it a six-year low, but motorists should also be aware that the lower it goes, the more likely the possibility of an upward correction."
Amber Millar filled up her Toyota RAV4 at Armadale's Puma Energy service station, one of the outlets selling Perth's cheapest petrol yesterday.
She said she was saving $20 to $30 a week and never thought petrol would get so low again.
"I'm loving it," she said.
"If you are on a budget week to week, it's a huge saving."
Mrs Millar said motorists would be "stoked" if petrol fell to 85¢ a litre. "It means you can do a lot more with your money."
CommSec chief economist Craig James said while petrol was on track for $1 a litre, fuel companies were unlikely to sustain prices below that mark.
Mr James said it would probably take a major oil producer such as Saudi Arabia saying it wanted a target of $40 a barrel to stabilise the oil price.
If the oil price fell to that point, it would cut a further 5¢ off the petrol price here.
But the oil price would need to be $30-$40 a barrel to force producers to reduce supply, he said.
"Effectively crude oil prices are in freefall," he said.
Mr James said the wholesale price in Perth yesterday was 104.6¢ a litre. That price would need to dip below $1 before motorists paid a similar amount.
