Petrol Sales Volumes in Australia Down in First Quarter

Petrol sales volumes across Australia opened 2023 on a quarterly decline at 2,221 million liters after hitting their highest since early 2020, in the early days of the COVID pandemic, the country’s competition regulator reported Tuesday.

Sales reached a pandemic record of 2,333 million liters in the last quarter of 2022, the year when sales became more stable after disruptions by health restrictions, the Australian Competition and Consumer Commission (ACCC) said in its quarterly report for the petroleum market. Quarter on quarter changes did not breach five percent last year.

“… COVID-19 restrictions imposed in mid-March 2020 resulted in average petrol sales volumes in Australia being substantially lower in the June quarter 2020. Petrol sales volumes partially recovered in the 2 subsequent quarters as restrictions in parts of Australia eased”, it said. “They remained stable in the first 2 quarters of 2021, before decreasing significantly in the September quarter 2021. In the December quarter 2021, sales volumes rebounded.”

Average quarterly sales rose four percent in 2022 to 2,269 million liters from 2,175 liters in 2021. Last year’s quarterly average was eight percent higher compared to the 2,094 million liters logged 2020, the first year of the pandemic.

But sales have not returned to pre-COVID levels, with last year’s quarterly average seven percent lower than the 2,430 million liters recorded 2019.

“There are a number of reasons why petrol sales volumes may have not returned to pre-COVID-19 levels. These include increasing electric vehicle purchases; motorists not purchasing as much petrol as they did in the past due to increasing working from home arrangements; and the continuing trend of vehicles being more fuel efficient”, the ACCC said.

Lower prices

Motor vehicle fuel prices in Australia dipped 0.8 percent in January-March 2023 against the prior quarter. Diesel prices tanked 10.3 percent, while unleaded petrol prices were stagnant.

The decrease helped soften inflation in Australia, with the 1.4 percent increase in the Consumer Price (CPU) down 0.5 percent from October-December 2022.

In the one year to March 2023, the CPI climbed seven percent, with automotive fuel prices inching up 1.1 percent, but performed lower relative to 2022. The CPI expanded 7.8 percent last year, with motor vehicle fuel prices up 13.2 percent.

“The March quarter 2023 represents one year since the invasion of Ukraine, which saw automotive fuel prices increase by 11.0% in the March quarter 2022”, the report noted.

Higher Refining Profits

In 2022, in the first year of the Russia-Ukraine war, both of Australia’s two refineries saw earnings soar as commodity prices surged.

Ampol Ltd. posted $686.7 million in income before interests and taxes on a replacement cost basis for the Lytton refinery in Brisbane city, up over four times from 2021, according to the company’s 2022 annual report.

For the Geelong city refinery, Viva Energy Group Ltd. reported a 452 percent increase in profit before deductions on a replacement cost basis to $504.4 million, it said in its yearly report.

Energy prices spiked 2022 as governments responded with sanctions against Russia over the war. Australia on February 4, 2023 joined the European Union and the Group of Seven powers in agreeing price caps of up to $100 a barrel for refined oil products from Russia.

“This decision will hit Russia's revenues even harder and reduce its ability to wage war in Ukraine”, the EU said in a media statement the same day. “It will also help stabilize global energy markets, benefiting countries across the world.”

The Brent international benchmark for spot pricing hit its highest annual average in 2022 at $100.93 per barrel, while the Henry Hub global standard for natural gas averaged $6.45 per million British thermal unit (Btu), the USA distribution center’s greatest since 2008, according to the USA Energy Information Administration.

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