Oil shock: what’s in store?

AUSTRALIA – Just as we were starting to get used to petrol around $1.15, escalating tensions over Iran’s nuclear intentions have pushed crude oil to a record $US73.67 a barrel and we are suddenly looking at petrol up to $1.45 a litre this week.

Petrol is already high, averaging $1.356 a litre around Melbourne yesterday, according to the RACV, and you should have avoided at least one petrol station selling at $1.398.

Worse, some are calling crude as high as $US100 a barrel over the next few months on rising global demand alone, and up to $US200 a barrel should tensions in the Middle East develop into yet another full-blown war.

At $US100, petrol will cost more than $1.60 a litre, carving an even bigger slab out of the household budget. In 1998, we were paying 68 cents a litre for petrol, half today’s price.

The Age