There's some good news for motorists and the economy in general. Experts are tipping fuel prices to drop even further which will in turn put downward pressure on inflation. But analysts don't think it will push the Reserve Bank to cut interest rates any sooner.
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00:00This transport company makes 4,000 deliveries a day to retailers and cafes.
00:08The owner says when the price of petrol comes down, it's good news for everyone.
00:13When the fuel comes down we pass that on, but things like rates, taxes, you know, they
00:19for us, they've gone up in the past year.
00:22The price of Brent crude oil fell below 70 US dollars a barrel this month, its lowest
00:27level in almost three years, and now it's hovering around 73 US dollars.
00:33That's pushed down the average petrol price at the pump to $1.78, and the average diesel
00:39price is now about $1.82.
00:42The oil price is shrinking mainly due to lower demand from China.
00:47Analysts expect the price to fall further, putting downward pressure on fuel prices.
00:52We're talking somewhere in the realm of $1.65 to $1.70.
00:56But there is a scenario where petrol prices could rise again.
01:00If tensions between Iran and Israel escalate, and there's a regional war, that would hurt
01:05oil supply.
01:07The big uncertainty is what oil producing nations in the Middle East decide to do.
01:12Economists say while falling prices are good for consumers, it won't lower underlying
01:17inflation as far as the Reserve Bank wants it to.
01:21It's going to help with the margin, but not by enough I don't think to have the RBA bring
01:25forward rate cuts into this year rather than next year.
01:28Back at the warehouse, John DeLosa is hoping those rate cuts come sooner.
01:33It would be a lot more helpful because people have more money, and the more money they have
01:38they can actually spend more on buying that extra steak or the extra biscuit or the extra
01:45cake.
01:46Extra spending for an economy slowing down in speed.