As recently as late June, the commodity - of which Australia is a net importer - was trading at $112.60 a barrel. Since then, the Organisation of Petroleum Exporting Countries has kept its output high amid what many commentators are calling a "supply glut".

On Friday Brent crude crashed 3.06 per cent to $US77.83 a barrel while December oil futures plunged 3.82 per cent to $US74.23.

At the pump most Australian motorists are paying less than 140 cents per litre, the cheapest in 18 months. Over the last week the average unleaded petrol price in Sydney fell 6.2 cents to 134.2 cents per litre; in Melbourne it fell 5.9 cents to 135.9 cents.

The prevailing opinion is that Australian and global economy will benefit from a sustained drop in the oil price, even though Australia is a net energy exporter. Local oil companies and government tax revenue will be particularly hard hit.

"From an economic perspective it's a very big positive, the positives far outweigh the negatives," said Commsec economist Savanth Sebastian. "The flow-on effect for business is a very big positive, we've already seen the rebound in transport stocks and airlines. The other positive is the impact on household budgets. In the last four months or so households have saved 20c a litre on the pump."

Mr Sebastian said that in January the average household spent $189.72 on fuel per month. Now it's $168.60.

While the transport and airline sectors would also enjoy cost savings, it should not be automatically assumed they will pass these on to customers, he said.

"The question now is whether they'll keep the margin given the cost pressures that a lot of the sector has had over the last few years. But it may be that a lot of that is passed on to the consumers, who will then drive retail activity. We'll probably see that take place over the next couple of months."

There will be other macro-economic benefits as well: reduced inflationary expectations and downward pressure on interest rates, said Mr Sebastian.

The "big losers", he said, were "no doubt the energy stocks". However, there will be some upside for resources companies. "The iron ore companies trucking product across the Pilbara will benefit from cheaper fuel."

Cheap oil would be here to stay unless there was a global growth crisis, he said. "It's pretty clear the world is well supplied with oil."

JP Morgan economist Ben Jarman said the plunge in the oil price was "about as good a free kick as you're going to get for the consumer globally".

"If you look at a single chart of oil prices versus global real retail sales volumes you can easily see the historical correlation. Retail sales can start rising at a 6 or 7 per cent annual rate whereas currently they're a bit over 3 per cent."

In Australia, cheaper oil would take one or two tenths of a percentage point off the inflation figure and fuel demand in the consumer, hospitality and services sectors. "The other drivers of disposable income haven't been particularly favourable - poor jobs growth, unemployment still going up, low wages growth - and so you're grateful for any support you can get. Lower oil prices certainly help."

Global growth forecasts could even be revised, he said, and Australia would benefit if India and China started importing more. But the Chinese slowdown and Europe's sluggishness were still weighing too heavily on the world economy, although that could change if the oil price continued to fall. "Had we not had the fall in oil, growth forecasts would have been under downward pressure because of a lack of global momentum outside the US."

An OPEC meeting in Vienna on November 27 has been billed as the most important meeting of the organisation in years. Analysts are split as to whether that the group will agree to cut supply and hike prices.

OPEC could be taking a very long-term view, said Mr Jarman, with growing competition from alternative energy sources driving the cartel to sell as much oil now as possible. "It's making hay while the sun shines, producing as much now while oil is still being absorbed by buyers," he said. "These things tend to fray the bonds of a cartel." Saudi Arabia was the main culprit: "They're reminding everyone just who the lowest-cost producer is and the Saudis can play this game as long as anyone."

He did not expect the OPEC meeting to make major changes and the price free fall could well continue. "It now is looking like they won't be cutting production in that meeting, which means we see the risks of falls to the $US65-$70 per barrel range early in 2015," he said. If that happened, global growth could well be revised, he said.

UBS oil analyst Nik Burns said the drop in the oil price came despite the unrest in Russia and Ukraine and the Saudis publicly declaring they were not interested in a price war.

The OPEC meeting later this month was the one "everyone was waiting on, that's the only date everyone's worried about".

Consumers as well as airline and transport companies would all benefit, said Mr Burns, but oil companies would suffer - big producers suchas Woodside, Santos and Oil Search as well as smaller players Beach Energy, Drillsearch, AWE and Senex. Woodside's share price has fallen 10 per cent since September. Senex shares, which were around 75c in May, are now less than 45c.

However, investors seemed to be pricing in a revival of the oil price, he said. "We'd argue that the way the market is pricing a lot of these stocks there's still an expectation that there will be a recovery in the oil price in the short to medium term," he said.

Mr Burns said UBS was expecting oil to recover to $US100 a barrel. The price needed to be at this level to make further oil exploration viable, he said. "There needs to be annual global investment of $300 billion a year," he said. "If the oil price continues to fall, that investment won't follow and future oil supplies won't be able to keep up because of underinvestment."

In the short term, the lower price could affect tax revenue for Australian governments, he said. This was, in part, because the oil price affected the rapidly growing export of liquefied natural gas. "Most LNG that's sold out of Australia is sold on an oil-linked price, so low oil prices will have an impact on Australia's budget position."