Premium fuel price on rise

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www.drive.com.au

Diesel fuel prices have recently fallen below those of petrol for the first time in a decade. But while diesel buyers rejoice, there's likely to be more pain ahead for petrol buyers. Georgie Wells, a spokeswoman for retail fuel supplier Caltex Australia, said prices for premium petrol - mainly used in luxury or performance cars - were rising while regular 91RON petrol was stable. She said the price petrol stations paid Caltex for the fuel they sold at the pump had risen by 1 cent a litre for 95 RON fuel in the last month, while the price for 98 RON fuel had risen by 2 cents a litre. That did not include the margin added by the petrol stations. Caltex's retail fuel price is calculated using the cost of producing 95 RON fuel in Singapore, the closest international fuel-trading hub. Ms Wells said that while the cost of producing 91RON fuel had not changed, higher-grade fuels had become more expensive for reasons the company could not explain. She said Asia's slowing economy had pushed diesel fuel prices below petrol's for the first time in more than a decade as regional demand dried up. At times, diesel has cost up to 30cents a litre more than petrol. Shell Australia spokesman Paul Zennaro said the thirst for diesel fuel in Asia, and an oversupply of petrol, meant that cheap petrol had flooded into Australia for the past few years. Ms Wells said the market forces of dwindling supply and steady demand were likely to push fuel prices higher. "The way that refineries work is that if there is a slowdown or cut in production for one product, it affects the other one," Ms Wells said. "There's only so much diesel and so much petrol that they can produce, and if you cut one then you cut the other."