Oil and glut: two words that when put together, spell good news for motorists.
An oversupply of oil on the world market, combined with weaker than expected demand, has seen oil prices slide since mid-June.
Australian petrol prices have duly followed suit.
The average petrol price has fallen from around $1.58 per litre in July to around $1.44, while Brent crude oil prices have dropped below $US100 a barrel for the first time in more than a year.
The Australian Automobile Association said capital city residents had fared better at the bowser than those in country areas.
In Sydney, petrol prices were as low as $1.299 per litre on Friday morning, while prices were still well above $1.50 in parts of the country.
The AAA, which represents motorist bodies like the NRMA and RACQ, said fuel retailers in major cities had cut fuel margins recently, though those discounts are likely to be wound back soon.
"Drivers in parts of Sydney, Melbourne and Brisbane have particularly benefited from lower retail prices but it appears that discounting is coming to an end," a spokesman said.
"Unfortunately, people in regional areas have not had the advantage of any discounting with prices remaining steady."
And it could soon be a case of what lower oil prices giveth, the higher Australian dollar taketh away.
The currency has been on the slide this week, dropping from almost 94 US cents on Monday to under 91 US cents, pushing up the cost of imports.
Further falls are likely for the Australian dollar over the next year as the US Federal Reserve unwinds economic stimulus measures that have weakened the greenback in recent years.
But CommSec chief economist Craig James said the timing of the fall was a good thing, and prevents the inevitable price rise that motorists would otherwise have seen.
Oil prices are unlikely to fall much further, he said, with Saudi Arabia cutting production to alleviate some pressure on the market, and demand likely to improve over time.
"I would think a global oil price of somewhere around $US95 and $US100 would be a sustainable level and I think that's something producers would be keen to preserve," Mr James said.
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