Australians are feeling the impact of inflation at the petrol pump with the latest data expected to show fuel prices rose by more than 7% in the three months to the end of September.
Treasury estimates the latest consumer price index data for the September quarter, to be released on Wednesday, will reveal the soaring cost of petrol brought on by global factors including the war in Ukraine, supply constraints and the weaker Australian dollar.
The rising cost of fuel will add around a quarter of a percentage point to inflation for the three months, Treasury estimates.
The federal treasurer, Jim Chalmers, has warned prices could rise further as the conflict between Israel and Hamas in the Middle East worsens.
“While inflation is moderating overall, it’s more persistent globally and so it will be more persistent here as well – and we expect to see some of this reflected in the quarterly inflation figures this week,” Chalmers said.
“Whether it’s global cuts to oil production, the war in Ukraine or the conflict in the Middle East, the challenges coming at us from around the world are being felt around the kitchen tables of hardworking Australians.
“Although it won’t have an impact on inflation in the September quarter, conflict in the Middle East is adding further uncertainty to petrol prices.”
Australian Bureau of Statistics data for August revealed fuel prices rose 9.1% in August with the cost of unleaded petrol rising an average of 17 cents a litre. The monthly average price of petrol reached 200 cents a litre.
The expected uptick in inflation means all eyes will be on the Reserve Bank’s meeting on Melbourne Cup Day – and whether it keeps the cash rates on hold for another month or increases them to 4.35%.
The RBA, under the new governor, Michele Bullock, has said it will have little tolerance for failing to meet its target of bringing inflation back down by late 2025.
The board noted in its 3 October meeting “the rise in retail petrol prices would continue to underpin inflation over coming months and could influence households’ inflation expectations”.
“Some further tightening of policy may be required should inflation prove more persistent than expected,” the RBA said.
Bullock is expected to deliver a speech on Tuesday evening at the Commonwealth Bank’s Global Markets Conference in Sydney before the release of the next day’s CPI figures.
Interest rates have remained steady at 4.1% for four months.
In August the headline CPI jumped 0.3% to 5.2%, according to the ABS, representing the first increase in four months.
Inflation in Australia peaked at 7.8% in the December quarter and has been steadily reducing.
