The good news for motorists is that petrol prices are still down on a year ago. The bad news is that the early-February low-point for pump prices is now a distant memory. Pump prices are set to rise a little further in coming weeks, based on higher Singapore gasoline prices and domestic wholesale petrol prices.
After falling by 12.2 per cent in the March quarter, the petrol price is currently up by 13.1 per cent in the June quarter, boosting the economy-wide inflation rate by 0.4-0. 5 percentage points in the quarter. Petrol is on track to the biggest quarterly increase in 24½ years (since December quarter 1990).
Consumer sentiment has softened in recent weeks, and it is highly likely that the lift in petrol prices and a weaker Aussie dollar are key culprits driving the gloomier disposition. It is not that the economic environment has deteriorated markedly; rather it isn’t as favourable as it was a few months back.