Countries throughout Asia and the Pacific are preparing for increases in the price of crude oil as global supply is reduced. The significant gap between global supply and demand leading to Brent Crude barrel prices of up to $US100 by the end of 2018. In Australia, this has been reflected by record petrol prices where the price per litre is at a four-year high, including a 10% increase on the average 2017-2018 price.
As the majority of fuel is imported, the weak Australian dollar is further contributing to the increase in fuel prices. With fuel contributing to large portion of businesses such as aviation, rail, shipping and road transport, these rising costs will be past onto customers and contribute to rising prices in the economy generally.
These record prices already have and will continue to pressure firms into finding savings in other areas. While there is little a company can do about fuel prices, firms that have contracts in place rather than spot buying can secure more competitive pricing and can put formula based pricing mechanisms in place. Additionally, capital investments in fuel storage and monitoring technology can allow firms to improve the efficiency of fuel usage and lower operating costs in the long run.