“Historically, we haven’t seen those sorts of lows in 20 years,” Dr Rivers said on Tuesday.
He didn’t expect the full benefit of the bottoming-out of wholesale prices would be passed onto consumers, noting the major players will “absorb a lot of the winnings” in the concentrated market.
Australia also has an excise tax on fuels – set at 42.3¢ per litre – which will “buffer the fall”.
Dr Rivers expected petrol prices at the bowser to jump straight back up when the economy recovers from the pandemic, though that could be some time from now.
A feud between Russia and Saudi Arabia worsened oversupply in March.
David Byrne, an associate professor of economics at University of Melbourne, said a deal to cut global oil production could result in a slight uptick in prices in May.
But that’s unlikely to be a big recovery if travel is still restricted around the world.
“If anything, it’s going to be dominated by worries that this COVID-19 demand shock, it’s not ending in July. It’s potentially going into 2021,” Professor Byrne said.
“As long as there’s no travel, the prices aren’t going to recover anytime soon.”
He expected average prices at the pump in Melbourne to fluctuate between the 80¢ to 99¢ per litre range at least over the short term.
US crude oil futures collapsed below zero for the first time in history, plunging to minus $US37.63 a barrel overnight as traders paid to get rid of oil.
Australia imports most of its oil from Malaysia and Singapore but global markets are expected to follow a similar trend to the US.
RACV senior vehicle engineer Nicholas Platt said he expected consumer prices to keep falling.
“Usually, there is a lag time of two weeks to reflect shipping and refining times, however, recently we have seen wholesale prices react much more swiftly to changes in commodity prices.”
The average unleaded price in Melbourne on Tuesday was about 99¢ a litre, according to the RACV fuel tracker.
“The wholesale prices are currently at approximately 81¢ per litre and as part of the competitive discounting. Many retailers may even drop their prices to as low as the wholesale price,” Mr Platt said.
One Brunswick service station was charging 83.9¢ for unleaded and 79.9¢ for unleaded E10.
Professor Byrne said petrol price cycles had continued to function despite the instability and urged motorists to take advantage of the regular movement at the bowser.
The RACV fuel price tracker listed the highest price as $1.299 a litre compared to the cheapest at 87.9¢. The average was 98.7¢ a litre on Tuesday morning.
A month ago, wholesale prices were about $1.04 a litre, but more than 100 service stations were still charging $1.60.
Rachel is a breaking news reporter for The Age.