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Sydney transport costs 'alarming': NRMA

Sydney families are forking out record amounts on transport, with the cost of filling up at the bowser climbing as petrol prices peak at a two-year high.

A quarterly NRMA report released on Tuesday found Sydneysiders were spending an average of $22,350 on transport every year, a third of the average NSW income, and the highest figure in the nation.

The price hike was attributed to the rising costs of car financing, registration, tolls and fuels.

The price of regular unleaded petrol in Sydney hit $1.41 cents per litre on Tuesday, according to CommSec Research, the highest price since October 2015, the NRMA said.

The portion of the average family's budget being spent solely on travel is alarming, NRMA spokesman Peter Khoury says.

"Certainly if the start of this quarter is anything to go by, it's going to be a tough few weeks for motorists," he told reporters in Sydney.

NRMA predicts fuel prices will go up another cent, then drop to an average of $1.25 before rising again as part of the "fuel cycle", Mr Khoury said.

"Some people are saying it's going to be a really tough Christmas.

"And the nature of the sector is such (that) prices could go up more, or they could drop, we have to wait and see."

Fuelling the rise according to Mr Khoury is the uncertainty and instability in the Middle East.

"We've seen world oil prices jump six or seven dollars a barrel over the last two weeks so unfortunately, that is now flowing on to bowsers here at home," he told reporters.

"The market is so volatile, things could come back to normal in a few weeks or they could get worse - it's really hard to forecast."

In the meantime, he says motorists can save "hundreds of dollars a year" by using apps that provide real-time data on service stations across the state.