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Spike in petrol prices adding to inflation pain

Australian households already dealing with cost of living pressures are facing further pain with global conflict fuelling higher petrol prices.



Petrol prices have jumped by more than seven per cent in the three months to September, piling further pain on Australian households grappling with a cost of living crisis.


Treasury expects the jump in the cost of fuel to add a quarter of a percentage point to inflation for the September quarter when the latest consumer price index figures are released on Wednesday.


The conflict between Israel and Hamas in the Middle East is also expected to raise global oil prices, but this won't be captured in the September inflation data.


Wednesday's figures from the Australian Bureau of Statistics will be scrutinised ahead of the Reserve Bank's interest rate meeting on Melbourne Cup Day.


The decision of oil-producing countries to slash supply, the war in Ukraine and the weaker Australian dollar are some of the reasons behind the rise in petrol prices.


As of July, the price of crude oil has risen from about $106 to more than $140 per barrel.


Petrol prices increased 6.6 per cent in the US, and 16.5 per cent in New Zealand over the last quarter.


Treasurer Jim Chalmers said inflation was proving more persistent both globally and in Australia, which would be reflected in the quarterly inflation figures.


"Higher petrol prices and the costs of other essentials are putting Australians under the pump and that's why our government's primary focus is to address inflation and the cost of living," he said.


"That's why we're rolling out $23 billion in relief through our 10-point plan to ease cost-of-living pressures, in responsible ways that don't add to inflation." 


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