Australian motorists buying less petrol

On 29 May 2008, energy economics group EnergyQuest reported that motorists are changing their petrol-buying habits in response to Australia's record petrol prices. However, sales of diesel fuel continue to grow strongly, driven by demand from business and truck owners, who have fewer alternatives for fuel or the ability to reduce the amount of traveling they do.

EnergyQuest research revealed that Australian petrol sales fell by 55.7 million litres (1.2%) in the three months to 31 March 2008, compared with the same period last year. Unleaded petrol consumption dropped 4.4%, while sales of the more expensive premium unleaded decreased by 7.2%. LPG sales increased 3.8%, while consumption of ethanol blends (generally cheaper than regular unleaded) grew by a massive 176%.

Motorists driving less

"Our research shows motorists are doing what they can to manage their fuel costs, by driving less and using the cheapest fuels they can find," EnergyQuest CEO Dr Graeme Bethune said.

"Unfortunately motorists are soon going to have fewer cheaper alternatives. Current government policy is to introduce excise on LPG, ethanol, biodiesel, compressed natural gas and liquefied natural gas from 2011."

Dr Bethune said that while petrol sales fell, diesel fuel consumption grew by 226.3 million litres (5.4%) in the March 2008 quarter, despite diesel prices being significantly higher than petrol.

"Higher diesel prices are a global phenomenon, reflecting strong Asian demand, the move to low sulphur diesel and tight refining capacity," he said.

Despite the fall in petrol demand, total Australian fuel demand grew by 155.4 million litres during the same quarter, leading to a 20.7% surge in net imports of transport fuels to 10,221 million litres for the quarter. The strong imports and higher oil prices resulted in a record quarterly petroleum trade deficit (notwithstanding LNG exports) of A$3,236 million.

"Australia's petroleum imports are now costing over one billion dollars a month," Dr Bethune said.

EnergyQuest was established by Graeme Bethune in 2005 to provide strategic research on Australian oil, gas and other energy sources. EnergyQuest's clients include major Australian companies, most Australian governments, institutional investors and a number of international companies. To subscribe to the free newsletter, go to HYPERLINK "http://www.energyquest.com.au" http://www.energyquest.com.au

The statistics used in this research are from the Australian Petroleum Statistics, compiled by the Department of Resources, Energy and Tourism, and the ABS Merchandise Trade Statistics.

As MotorMouth's recent (16–30 June 2008) user poll result indicates, the most likely response by motorists is to use their vehicles less.

As fuel prices continue to increase, what changes do you plan to make to your everyday transport needs?