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Petrol prices tipped to soar

MOTORISTS may see petrol prices moving towards $1.70 a litre at peak times in coming months as the dollar weakens and global oil prices rise.

MOTORISTS may see petrol prices moving towards $1.70 a litre at peak times in coming months as the dollar weakens and global oil prices rise.

Treasurer Chris Bowen maintains the Australian dollar's decline to US90c will be good for business confidence and manufacturers but analysts warn that households will face a cost squeeze as petrol prices rise sharply over the coming weeks.

Fuel is one of the biggest weekly purchases for most households and the recently broken $1.50 a litre threshold is seen by many economists as a key stress point at which household start to cut back on their discretionary spending.

This is more bad news for a retail sector already struggling against increasingly cautious consumers and the broader economy as it transitions away from the mining boom..

Petrol prices are already above $1.50 a litre at the bowser in most cities and this will continue to soar as the double whammy of higher oil prices and lower Australian dollar hit home in the next few weeks, economists said.

The price of oil hit a 14-month high of US$103 a barrel over the weekend on concerns about stability in Egypt while the Australian dollar dropped back to US90.6c - just above its recent 3-year low.

The Australian dollar's collapse from $US1.05 over the past two months has already added 11c to the price of petrol.

Last year, the national average price of unleaded petrol was $1.35 or under in all of the major cities, according to data from the Australian Institute of Petroleum.

published 23/07/2013

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