Petrol has quietly risen to an eight-month high in Australia, as crude oil climbs past the $US72 a barrel mark. On May 1, the price was more like $US50 a barrel. The average national price of petrol in Australia was $1.22 last week. Experts warn the market appears to be factoring in the end of the economic downturn. And that means petrol prices are on the rise.

Commsec told the Sydney Morning Herald last week the benchmark price for Singapore crude has risen almost 40 per cent in the past month, but the rise hasn't translated to Australian petrol prices - yet.

In Western Australia last Wednesday, Caltex pushed the price of petrol up 18 cents a litre, to $1.36, while BP rose 15.4 cents to $1.34. Coles had the cheapest petrol, at just over $1.15 on average.

In London over the past month, petrol prices have made their second-largest monthly rise ever, to the equivalent of $2.09 a litre. In the USA, petrol prices have risen every day since April 29, and are nearly 60 per cent higher than the beginning of the year. The national average petrol price in the USA was the equivalent of 86.5cents per litre, Australian.

In Queensland, petrol prices will rise at least 8.3 cents a litre on July 1, as the Bligh government abolishes the state's fuel subsidy.

Queensland Premier Anna Bligh says the move, which costs her state's taxpayers $500 million annually, will bring Queensland into line with other states.
 
The Algerian Energy Minister says crude oil could stabilise at around the $90US a barrel mark mid-next year.

If he's right, that will be a further 25 per cent rise over the next 12 months. Time to face facts: This is exactly what Ford and Holden don't need, at a time when both are struggling to find relevance in a tough market increasingly disinclined to justify purchasing a large car.

The CSIRO says that Australia is more vulnerable than some countries to increases in oil price. It says low-income Australians will suffer the most if oil prices rise, and expects most people will be ill-prepared for what rises do occur.

The bottom line is that almost all of the oil on Earth has been found. So don't bother trying the Jed Clampett routine at home. There's no Texas Tea under the Hills Hoist. Oil is being ripped out of the ground right now as fast as it can be exploited. And the burgeoning economies of China and India are warming up again, after a short 12 month break. So the party's back on, everyone's even thirstier than before, but the keg's more than half empty. It can only get ugly, long-term. In the face of those fundamentals, oil price are heading only one way: North. And soon.

So if you're buying a car soon, think ‘fuel efficiency'. And if you're not, think ‘LPG conversion'.

Console yourself that the high future price of oil will ensure the viability of alternatives that will be almost as good practically, and way better for energy security and the environment.

For fuel-saving tips, click HERE