Fuel prices are influenced by many factors, including overseas and local market forces. While the ACCC does monitor petrol prices, we do not set or control them.
Fuel prices can go up and down due to a combination of factors:
- changes in international benchmark prices
- the value of the Australian dollar relative to the US dollar
- levels of competition in different areas
- pricing decisions by wholesalers and retailers.
For petrol, diesel and automotive LPG the largest component of the price you pay is represented by the international benchmark price.
The current benchmark prices for fuels sold in Australia are:
- Regular Unleaded Petrol – Singapore Mogas 95 Unleaded
- Diesel – Singapore Gasoil 10 parts per million sulphur
- LPG – Saudi Contract prices for butane and propane
Changes in international prices can take around two weeks to work their way through the supply chain in Australian cities and longer in regional areas.
Petrol prices in Australia tracked against the international benchmark
The chart below shows how the price of petrol in the five largest cities (Sydney, Melbourne, Brisbane Adelaide and Perth) has been tracking against the international benchmark price over the last 90 days.
Source: Australian Competition and Consumer Commission, FUELtrac, Reserve Bank of Australia and Platts, the energy information division of McGraw-Hill, Inc.
Retail prices are seven-day rolling averages. They are regular unleaded petrol prices in all cities except Sydney which are E10 prices.
The international prices are seven-day rolling average Singapore Mogas 95 Unleaded prices, lagged by 10 days.
As international benchmark prices for petrol, diesel and LPG are priced in US dollars (USD), a change in the value of the Australian dollar (AUD) relative to the USD may affect the domestic price of fuel.
However, don’t expect fuel prices to fall every time the Australian dollar is higher than the US dollar. This can only happen if the benchmark price remains the same or falls and other local factors don’t push prices up.
Like any other business, fuel wholesalers and retailers have different costs they need to recover through their prices. These can include wharfage, freight, insurance, transport, storage, salaries, rent, power and other utilities. On top of this, wholesalers and retailers need to make a profit in order to make their businesses viable. This margin is ultimately determined by the level of competition in the marketplace.
Transportation and storage of LPG is more expensive than for petrol and diesel because LPG must be kept as a liquid which requires specialised storage and transportation.
All retail fuel prices in Australia include GST at the rate of 10 per cent (or 1/11 of the total price paid).
Excise rates on fuel and petroleum products (other than aviation fuels) are indexed twice a year in line with the consumer price index (CPI) – generally in February and August.
Automatic indexation of fuel excise was re-introduced by the Australian Government on 1 July 2015.
For unleaded petrol (regular or premium grades) and diesel the price you pay includes Australian Government fuel excise, set at $0.412 per litre, as at August 2018.
For automotive LPG the price you pay includes excise of $0.134 per litre, as at August 2018.
More information on current fuel excise rates for all fuel types may be viewed on the Australian Taxation Office (ATO) website.
Some consumers think petrol prices increase by more than usual just before public holidays and long weekends.
Our last detailed review of prices in the five largest cities around every public holiday found that, on average, public holiday price increases were no larger than the usual price cycle increases during the year.
These price rises may be more noticeable before holiday weekends because many motorists are making long trips and using more petrol than usual.
A petrol price cycle is a movement in retail price from a low point (or trough) to a high point (or peak) to a subsequent low point. In these cycles, prices steadily go down for a period followed by a sharp increase.
Price cycles are the result of deliberate pricing policies of petrol retailers, and are not directly related to changes in wholesale costs.
The duration of petrol price cycles in Sydney, Melbourne, Brisbane and Adelaide varies from cycle to cycle, and has increased in recent years.
In 2017, price cycle durations in these capital cities ranged from a low of 11 days to a high of 61 days.
In Perth, the price cycle has consistently remained around seven days.