With fuel at 12-month low, drivers told to fill up fast before bowser bonanza dries up

Motorists on Australia's east coast are enjoying the cheapest fuel in almost a year and have been urged to fill up their tanks today, before prices spring back up again.

The average price of unleaded petrol was 102.9¢ a litre in Melbourne on Wednesday morning - the lowest since February 2015, according to the RACV - and was as low as 99.9¢ at some bowsers.

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 Photo: Patrick Cummins

Sydney's average price was 101.2¢ a litre, with some service stations pumping at 96.9¢, which was also the lowest price since February, according to the NRMA.

"We've hit the lowest in 12 months and if it went any lower it'd be the lowest in seven years," NRMA spokesman Peter Khoury said.

Mr Khoury said despite the Australian dollar falling against the greenback, falling global oil prices were finally being passed on at the bowser.

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"Global factors have determined this type of movement; oil prices have been falling consistently now since about November," he said.

Mr Khoury said an upward cycle in Adelaide suggested the fuel price in Sydney and NSW would likely go back up soon.

"But these [low] prices will potentially be back, because the forecast for the next cycle is positive too," he said.

RACV monitoring shows Melbourne's daily average unleaded price fell about 17 per cent over the past four weeks, from $1.25 on December 30 to $1.03 on Australia Day, while the amount service stations have been paying at the terminal gate has fallen only a few cents.

RACV fuel spokesman Michael Case said that Melbourne was near the end of an unusually long price cycle of almost five weeks, when they normally last between 10 days and two weeks.

That meant prices at the bowsers could jump by as much as 20¢ at any point, he said.

"We know from experience that these conditions of a price cycle lasting this long and the retail price getting down to this close to the wholesale price is an indicator that we're near the end of the current cycle," Mr Case said.

"So today would be a really good time to fill up and save a significant amount of money."

RACQ spokesman Michael Roth said the average unleaded price in southeast Queensland was 108¢ on Wednesday - also a 12-month low.

He said Queensland was normally about a week behind Sydney and Melbourne and hoped the price would fall by another 5¢ before the cycle ended.

The cheapest fuel in Brisbane was 104.9¢ a litre on Wednesday.

Australian Institute of Petroleum monitoring shows the national average price of unleaded petrol fell by 6.3 cents to 133.7 cents last week, which was the biggest weekly fall since November 2008.

Diesel drivers not so lucky

Diesel drivers are not having as much joy, despite the national average wholesale price falling to an 11-year low on Monday.

Commsec chief economist Craig James said diesel drivers might have reason to feel aggrieved by the prices they were paying at the bowser, with an average mark-up of 29.2 cents a litre, compared with a mark-up of just over 10 cents a litre on unleaded.

Mr James said the global oil market remained volatile and uncertainty over when and if producers decided prices had fallen far enough made Australian petrol prices unpredictable.

"Prices are likely to stay relatively low for the foreseeable future, but motorists have got to be aware that producers are experiencing a degree of hurt at the moment with these low levels," he said.

"Fundamentally what we have at the moment is too much supply in the world compared to demand and that's putting downward pressure on price.

"You would expect at some point the producer will get together and try to limit the supply on the market."

Crude oil prices jumped overnight off the back of renewed hopes oil producers were closing in on a deal to restrict output, with Brent crude rising $US1.78 to $32.28 a barrel.

Brent was last week the cheapest it had been since November 2003, hitting $27.10 a barrel on January 20.

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