Petrol could fall to $1.50 a litre within a fortnight and interest rates appear even more firmly on hold after evidence of slowing price inflation for businesses.
The good news comes after a fall in the international oil price last week of about $US15 a barrel.
Every $US1 fall in the price of oil flows through roughly to a 1 cent fall in Australian bowser prices.
An economist at CommSec, Savanth Sebastian, said relief for motorists was not far away.
"The national average price is likely to fall by around 10 to 13 cents to $1.50 a litre in the next fortnight," he said.
The average pump price was $1.63 a litre at the weekend, which meant the average household was paying $228 a month on petrol, up $58 over 10 months, Mr Sebastian said.
A survey of business costs released yesterday by the Bureau of Statistics found prices paid by producers rose 4.7pc last financial year, less than expected.
As the economy slows, businesses are expected to find it harder to pass through higher costs to consumers, helping to contain inflation pressure.
Tomorrow's consumer price reading is expected to show inflation at a fresh 16-year high of around 4.3pc last financial year.
But mounting evidence that the economy is slowing - recession-level consumer confidence, fewer new home loans and a shrinking number of job ads - is expected to keep the Reserve Bank from raising rates in the forseeable future.
The bank's governor, Glenn Stevens, said last week that interest rate settings were already tight and the chances of controlling inflation were "good".
Financial markets are pricing a 50pc chance of an official interest rate cut in the coming 12 months.
Economists are tipping the slowing global economy will ease pressure on petrol prices.
They say lower demand from the US and Europe for manufactured goods from China will slow demand there for natural resources.
But the seemingly relentless increase in prices for oil and construction materials over the past year has been the force driving higher costs for business, yesterday's producer price index shows.
NSW clocked the fastest rise in the price of construction materials, the bureau said, driven by a non-residential construction boom.
Across the nation, concrete and steel price rises were the biggest contributors to higher construction costs.
Food prices rose just 0.5pc over the three months to June, reflecting falling prices for fish, fruit and vegetables.
There is no direct correlation between producer prices and consumer prices, but falling prices for fruit are expected to be mirrored in tomorrow's consumer price index.
The figures also reveal Australian businesses are getting less of a benefit from cheap imported goods.
The price of imports fell 3.2pc over the year, down from an annual price fall of 5.1pc recorded the year before.
"The extent of lower import prices is clearly waning," an economist at the Commonwealth Bank, Michael Workman, said.
"There are fewer price falls in the imported categories with each new quarterly release. China is no longer exporting deflation."
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