Petrol prices have struck their highest level in 20 months, despite cars being used less because of coronavirus lockdowns.

New figures from the Australian Institute of Petroleum showed the national pump price averaged 154.2 cents per litre in the past week, up 3.6 cents from the previous week.

Global oil prices rose in the past week due to concerns over US oil supplies.

“Supplies of oil from the Gulf of Mexico are still disrupted by Hurricane Ida. It is estimated that around 75 per cent of Gulf offshore oil output is still halted,” Commonwealth Securities chief economist Craig James said.

However, the Singapore gasoline price, which is more directly linked to future petrol prices in Australia, did ease slightly.

Even so, consumer inflation expectations are on the rise.

The most recent ANZ-Roy Morgan consumer confidence survey showed inflation expectations at their highest level in almost three years at a rate of 4.7 per cent.

The weekly report will be updated on Tuesday.

Inflation expectations provide an indicator as to where price pressures may be heading, and can be used in setting prices and wages.

The consumer price index did strike an annual inflation rate of 3.8 per cent in the June quarter, its highest level in 13 years.

But this was largely the result of an unwinding in stimulus measures that were introduced during the depths of last year’s recession and price pressures are expected to ease again.

The Reserve Bank of Australia does not forecast inflation to be sustainably between the two to three per cent target before 2024 and when it expects to be able to lift the cash rate from an emergency record low of 0.1 per cent.

Global markets have been jittery for some time about an inflation spike, particularly as central banks continue to pump liquidity into the global economy faced with the negative impact of the coronavirus pandemic.

But it is not a worry shared by Treasurer Josh Frydenberg.

In an address last week he said he was not overly concerned given the Australian rate of inflation because it has been below the target band for some time.

AAP

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