The price of crude oil is regularly reported in the news, but what impact does it have on the price of fuel in Australia?
Crude oil is distilled in a refinery to produce many refined products including diesel, petrol, jet fuel and fuel oil. The cost of crude oil forms a large part of the cost of manufacturing the refined product. However supply and demand for the individual refined products is the key factor determining their prices not the cost of crude oil. For example, increases in the price of crude oil will increase the costs of operating refineries, however those increased costs may not be able to be fully passed on in the form of higher prices for refined product if there is excess supply of the refined product available in the region. On the other hand, if there is a shortage of refined products, their prices may increase sharply even without any increase in crude oil prices. The prices of petroleum products from Australian refineries are based on their import parity prices, which are calculated according to the cost of importing the same products from Singapore refineries to Australia. They are n
Related Questions
- The price of crude oil is regularly reported in the news, but what impact does it have on the price of fuel in Australia?
- Why does the pump price of fuel not change at exactly the same time as the cost of crude oil?
- Why does the list price of fuel not change at exactly the same time as the cost of crude oil?
