Rising oil and petrol prices, or rather the intense and very public discussion of them has helped push consumer sentiment in June to its lowest in more than 15 years.

The reading, from Westpac and the Melbourne Institute mirrors the fall recorded in the Morgan consumer sentiment poll last Friday.

It’s also worse than the sentiment among business, which lifted slightly in the latest monthly survey from the National Australia Bank on Tuesday.

The latest Westpac-Melbourne Institute survey shows consumer sentiment fell to 84.7 points, almost a third lower than a year ago and was below 100 points for a fifth straight month.

That’s the lowest since December 1992 when the economy was emerging from the country’s last recession.

Westpac’s head of economics, Bill Evans expressed surprise at the reading and blamed the rise in petrol prices in the past month.

”Petrol prices are likely to have been the main culprit behind for this sharp fall in the Index. The price of petrol surged by 7.6% from $1.45 a litre to $1.56.”

Mr Evans said that unlike the last drop in confidence that was tied to a jump in petrol prices, which occurred in the wake of the Hurricane Katrina in the US in September 2005, consumers are also being hit by high prices in the grocery store.

The loss of confidence partly explains the downturn in housing and some retailing: although fast growing consumer entertainment retailer JB Hi-Fi is going against the trend with its second profit upgrade. That came only days after medium sized whitegoods retailer Clive Peeters revealed an earnings downgrade for the 2008 year with second half profits all but vanishing as sales dried up in April and May.

The extent of the downturn in housing and finance can be seen from the latest finance figures from the Australian Bureau of Statistics. They show that in April the total value of owner occupied housing commitments excluding alterations and additions fell 4.9% in seasonally adjusted terms.

The seasonally adjusted series for the value of total personal finance commitments rose 5.8%. This was due to a rise in revolving credit commitments (up 14.6%), which was slightly offset by a fall in fixed lending commitments (down 3.1%). Economists say that increase was due to the ending of margin calls and the re-establishment of new facilities as stockmarket conditions improved in April.

But in commercial finance, the seasonally adjusted value of total commercial finance commitments fell 14.6%, due to falls in both revolving credit commitments (down 20.2%) and fixed lending commitments (down 11.5%).

The latest figures confirm Tuesday’s downturn in housing finance lending. There’s been a 12% fall in year to date home loans and 18% excluding refinancings.

Economists say there’s worse to come with building and home loan approvals falling. The RBA won’t be troubled by an outbreak of inflation from the housing sector for quite a while.

Some economists are now warning not to expect a recovery until late next year at the earliest: others are saying not until well into 2010.