Prepare for diesel price rise, CommSec warns

The price of diesel is set to rise by three cents a litre over the Christmas period

By Ruza Zivkusic | December 8, 2010

The trucking industry will have to dig deep this Christmas as the diesel price is set to rise by three cents a litre.

Global oil prices have hit a high due to cold weather settling in across Europe and North America. Petrol is also set to rise by five cents, CommSec’s senior economist Craig James warns.

"The wholesale prices have gone up by 10 cents and the retail price has gone up by three cents so it’s pretty clear that the writing is on the wall that the retail price will need to rise in line with the higher cost," James says.

"The world price is moving up due to the strength of the Asian economy and also because of the cold snap they’re experiencing in Europe and in the US north east"

The strong Aussie dollar is helping insulate some of the pain but it can only do so much, James says.

"It depends how long it’s sustained for and that’s always the $4 question; if the temperatures come back to more normal levels in Europe and the US, some of those supplies are going to be taken out.

"If the supply comes on the market again it will push the price up."

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