CANBERRA - Record petrol prices on top of the latest interest rate rise are set to squeeze the nation's consumers unless they get relief in the federal budget.
Average petrol prices hit a record of almost $1.35 a litre during the past week, with city motorists paying just over $1.33 a litre while people in country areas are forking out $1.37.
All states and territories bar Victoria recorded price hikes during the past seven days, with Melbourne the only major centre to record any retreat in prices.
It is getting tougher for people in the north-western West Australian town of Port Hedland where prices lifted 1.8 cents a litre to break the $1.53 a litre mark.
Petrol prices have climbed more than 12 per cent during April, although with crude oil prices down there should be some relief at the bowser in the coming week.
The new petrol price figures undermined the latest retail trade result which showed a 0.3 per cent lift in retail turnover during March.
The March figures, which followed solid returns in January and February, were taken before the latest ramp-up in petrol prices during the past four weeks.
And the retail figures were propped up only by the food and hospitality sectors.
Westpac economist Jonathan Cavenagh said consumers were still picking and choosing what they spent their cash on, which did not auger well for an overall pick-up for retailers.
He said food had been improving for some time, while the jump in the hospitality sector was largely due to the Melbourne Commonwealth Games.
Apart from possible tax cuts and increased family benefits in the budget, there are not many positives for consumers ahead.
"We are yet to see what impact the recent spike in petrol prices and last week's interest rate rise have on consumer sentiment and spending impetus," Mr Cavenagh said.
National Australia Bank economist David de Garis said consumers had shown in March that they could sustain reasonably high petrol prices. But April could be different.
"(The) retail data shows that consumer spending in shops has continued through to the end of the March quarter, seemingly unfazed by higher petrol prices," he said.
"It will be an interesting test in April when petrol prices rose further."
There were ambivalent signs out of the April Cashcare retail activity index, which is based on EFTPOS activity.
It showed spending up 0.5 per cent over March, but it was down 0.4 per cent on the same period last year.
In raw terms, actual spending slipped 0.7 per cent during the month.
Australian Retailers Association spokesman Duncan Shaw said shoppers had been spooked by high petrol prices.
"The see-saw like effect of raw spending outcomes this year appear to be linked to Australian consumers confidence in what they will be spending at the petrol pump," Mr Shaw said.
"As we see Australians faced with higher costs of filling the family car, that is having a direct effect on discretionary spending levels."
Commsec equities economist Andrew Mitchell said some of the pain being suffered by motorists could be offset by the budget.
"Tomorrow's budget will act as something of a counter balance to higher interest rates and record petrol prices," he said.
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