The average price for petrol could hit $1.50 within a week and stay there for some time with interest rates following suit thanks to the world price of oil soaring to US$100 a barrel.
Last night oil prices soared to a record US$100 in New York as the global demand for oil and petroleum products continues to outstrip supply.
The surging economies in China and India and political tensions in oil producing nations like Nigeria and Iran have been driving forces behind the sudden price jump, and have been creating speculation that prices could rise even higher.
In Sydney the average price for petrol is $1.44 a litre.
NRMA president Alan Evans told the AAP today that the price of petrol could rise by five to seven cents over the next week, which would push average prices above the $1.50 per litre mark.
"It's quite a hike that is going to occur – at least somewhere between five to seven cents on top of what they'd be now," said Mr Evans.
"The rule of thumb is that for each dollar increase in the price of a barrel of crude (prices increase by) about a cent at the pump."
"Your average is going to come up around the $1.50 mark, while in the country, you're going to see them come up to the mid-$1.50 (range)."
Mr Evans said the effects of the petrol hike would be severe, and not just for motorists, but for the economy at large, with interest rates expected to cop a beating.
"My worry is that not only will it hit us at the pump, but it is going to feed inflation and then come through to interest rate rises."
