Ameer Randolph
Fuel prices in Australia have been a significant concern for households, especially with the rising cost of living. Petrol prices in Australia's largest cities, including Sydney, Melbourne, Brisbane, Adelaide, and Perth, have been observed to fluctuate, with prices increasing sharply and then gradually decreasing, a pattern known as a petrol price cycle. These cycles are influenced by pricing decisions of retailers and are not driven by wholesale prices. International factors, such as the war in Ukraine and the conflict between Israel and Hezbollah, have impacted fuel prices globally and in Australia. Additionally, the value of the Australian dollar relative to the US dollar also affects fuel prices in the country.
| Characteristics | Values |
|---|---|
| Factors influencing fuel prices | Global oil markets, exchange rates, government excise information, international benchmark prices, pricing decisions by wholesalers and retailers, levels of competition in different locations, pricing policies, and changes in wholesale costs. |
| Fuel price cycles | Regular patterns of price increases and decreases in Australia's five largest cities: Sydney, Melbourne, Brisbane, Adelaide, and Perth. The cycle duration varies between cities and over time. |
| Fuel price monitoring | ACCC monitors fuel prices and reports on the industry, fuel types (unleaded, diesel, LPG), and prices in capital cities and regional locations. |
| Fuel price tips | ACCC provides buying tips for motorists to save on petrol, including using fuel price apps and websites to find lower prices in their area. |
| Fuel excise | The Australian Government reintroduced automatic indexation of fuel excise on 1 July 2015. A reduction in fuel excise was implemented from 30 March to 28 September 2022. |
| Current fuel prices | As of 2025, prices fell due to a slowdown in global oil demand. In 2023, prices fluctuated, and in 2022, prices surged during the Christmas period. |
| Fuel prices and the economy | Fuel prices significantly impact household budgets and the cost of living. |
| International comparisons | Australia has among the lowest petrol and diesel prices of all OECD countries, according to the Australian Institute of Petroleum. |
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What You'll Learn
Petrol price cycles in Australia's largest cities
Petrol prices in Australia's five largest cities—Sydney, Melbourne, Brisbane, Adelaide, and Perth—move up and down in regular patterns, known as petrol price cycles. These cycles are caused by pricing decisions made by various petrol retailers and are not influenced by wholesale prices or underlying costs. While not all retailers participate in price cycles, they can be extremely frustrating for motorists, especially when prices increase rapidly and significantly.
The Australian Competition and Consumer Commission (ACCC) monitors and reports on the petrol industry and fuel prices for unleaded petrol, diesel, and LPG in these five cities and over 190 regional locations. They provide buying tips for motorists to save on petrol, which are updated three times a week and applicable to various types of unleaded petrol. The ACCC closely observed fuel prices following the Federal Budget reduction in fuel excise from March to September 2022, releasing quarterly reports on their findings.
Petrol price cycles can be utilised by motorists to determine when to buy petrol. Prices can increase sharply over a short period, then decrease gradually over a longer period before the cycle repeats. The duration of these cycles varies between cities and over time. For example, in 2024, the average duration of petrol price cycles differed across the five cities. Historical data can be used to estimate the cheapest and most expensive days to buy petrol in the future.
The price of petrol in Australia is influenced by global factors such as international crude oil prices, refined fuel prices, and the Australian-US dollar exchange rate. Local factors, like competition levels, can also affect retail prices. Australia has one of the lowest petrol prices among OECD countries, and the price of petrol at Australian refineries is based on international petrol prices.
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Factors influencing fuel prices
Fuel prices in Australia are influenced by various factors, including both international and local elements.
Firstly, global factors play a significant role in determining fuel prices in Australia. The price of crude oil in the international market is a key determinant, as it is a major input in the production of refined fuel. Changes in the global supply and demand for crude oil can impact the price of fuel in Australia. For instance, the war in Ukraine and the subsequent reduction in global oil demand led to fluctuations in fuel prices in 2022. Additionally, international benchmark prices, such as the Singapore price of petrol and diesel, and the market prices for Tapis and North Sea Dated (Brent), also influence fuel prices in Australia.
Secondly, the value of the Australian dollar, particularly against the US dollar, affects fuel prices. A stronger Australian dollar can sometimes lead to lower fuel prices, but this is not always the case, as wholesalers and retailers may have different costs that they need to recover through pricing. These costs can include freight, insurance, transport, storage, salaries, and other operational expenses.
Thirdly, pricing decisions made by wholesalers and retailers impact fuel prices in Australia. The level of competition in different locations can also influence the prices. Petrol price cycles, which are sharp increases followed by gradual decreases in fuel prices, are observed in Australia's five largest cities: Sydney, Melbourne, Brisbane, Adelaide, and Perth. These cycles are a result of the pricing policies of petrol retailers and can vary in duration between cities.
Lastly, local factors such as excise rates on fuel products and Goods and Services Tax (GST) can further impact fuel prices in Australia. Excise rates on fuel are indexed twice a year, while retail fuel prices include a 10% GST.
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How to save on fuel
Fuel prices are a major concern for many Australians, with global events such as the war in Ukraine and OPEC's oil production cuts causing prices to soar. While prices are rising, there are ways to save money on fuel. Here are some tips to help you maximise your fuel efficiency and minimise costs:
Plan your driving routes
Planning your route can help you save on fuel. Consider routes with fewer traffic lights and congestion, as these can improve fuel efficiency and reduce wear on your engine. Planning ahead can also help you avoid unnecessary detours and the need to double back, saving you fuel in the long run.
Maintain your vehicle
Keeping your vehicle well-maintained is essential for fuel efficiency. Ensure your engine is in good condition and consider the benefits of driving a manual car. While modern automatic transmissions have improved, driving a manual car gives you more control over gear changes, allowing you to utilise higher gears and save fuel.
Shop around for fuel prices
Fuel prices can vary significantly between cities, towns, and even suburbs. Utilise price comparison apps and websites to find the best deals in your area. Prices at independent service stations also tend to be cheaper than major chains, so consider filling up at smaller retailers.
Take advantage of loyalty programs and discounts
Many supermarkets and service stations have affiliate deals to promote customer loyalty. For example, Woolworths offers fuel discounts at participating Ampol stations, while Coles provides fuel vouchers for discounts at Shell stations.
Buy fuel at the right time
Fuel prices follow a cycle and tend to be cheaper on Tuesdays and Wednesdays, so plan your fill-ups accordingly. Additionally, consider buying fuel at night or dawn, as petrol expands when heated, and you'll get more for your money when it's colder.
By following these tips and staying informed about fuel prices, you can save money and make your fuel budget go further.
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The impact of fuel prices on households
Fuel prices in Australia have been a significant concern for households, impacting their budgets and daily lives. The price of fuel is determined by the market and influenced by various factors, including international benchmark prices, the value of the Australian dollar, and pricing decisions by wholesalers and retailers.
In recent years, global events such as the war in Ukraine and the conflict between Israel and Hezbollah have contributed to fluctuations in fuel prices. For example, after Russia invaded Ukraine in 2022, oil prices skyrocketed, affecting fuel costs in Australia. Additionally, OPEC's decision to cut oil production in 2022 also impacted fuel prices across the country.
The impact of fuel price increases is significant on Australian households. As fuel is a necessary expense for many, particularly those who rely on cars for transportation, an increase in fuel prices can directly affect a household's budget. This is especially true for households with multiple cars or those that require fuel for work, such as commuting to and from their workplace.
To manage fuel expenses, households may have to make difficult financial decisions and adjustments. Some may opt for more fuel-efficient vehicles or carpooling to reduce their overall fuel consumption. Others might need to cut back on non-essential expenses or find ways to generate additional income to offset the rising fuel costs.
While the Australian government does not regulate the fuel industry, they have implemented measures to mitigate the impact of fuel prices on households. For instance, the Federal Budget reduction in fuel excise from March to September 2022 aimed to provide some relief to motorists. Additionally, initiatives like Labor's 'fair fuel plan' aim to improve price transparency by requiring petrol stations to publicly announce price changes and lock in those prices for 24 hours.
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The Australian government's role in fuel pricing
Fuel prices in Australia are determined by the market and influenced by several factors, including international benchmark prices, the value of the Australian dollar, and pricing decisions by wholesalers and retailers. While the Australian government does not directly control fuel prices, they play a significant role in monitoring and regulating the fuel industry.
The Australian Competition and Consumer Commission (ACCC) is responsible for monitoring fuel prices to ensure a competitive and fair market for consumers. They track fuel prices in capital cities and regional locations, reporting on any issues or concerns. The ACCC also investigates potential breaches of competition and consumer laws, such as price-fixing or collusion between sellers.
In addition, the government sets excise rates on fuel products, excluding aviation fuels, which are indexed twice a year according to the consumer price index (CPI). In 2022, the Federal Budget included a reduction in fuel excise from March to September, demonstrating the government's ability to influence fuel pricing.
The Fuel Consultative Committee, established in 2010, facilitates dialogue between the ACCC, the fuel industry, and motoring organisations. This committee helps address fuel industry issues and promotes understanding between relevant parties.
While the government does not have direct control over fuel prices, they take action when necessary. For example, in response to rising fuel costs, the Victorian government announced a "fair fuel plan" in 2025, requiring petrol stations to publicly announce price changes and lock in those prices for 24 hours.
Furthermore, the government provides consumers with buying tips to help them make informed decisions and save money. These tips are based on price cycles and patterns observed in the five largest cities: Sydney, Melbourne, Brisbane, Adelaide, and Perth.
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Frequently asked questions
Fuel prices in Australia are set by the market and influenced by international benchmark prices, the value of the Australian dollar, and pricing decisions by wholesalers and retailers. In 2022, fuel prices fluctuated due to the Russia-Ukraine war and the restoration of the fuel excise. By October 2022, prices were expected to soar by up to 40 cents a litre.
International factors, such as the war in Ukraine and the recent cut in oil production by OPEC, have contributed to higher fuel prices in Australia. Additionally, fuel prices in Australia are influenced by the value of the Australian dollar relative to the US dollar, as international benchmark prices are set in US dollars.
Fuel prices vary across Australia's largest cities, including Sydney, Melbourne, Brisbane, Adelaide, and Perth, due to price cycles. These price cycles are the result of pricing decisions by retailers and do not always align with wholesale prices. For example, in December 2022, petrol stations just 1.5km apart had a price difference of up to 34 cents.
To save money on fuel, motorists can use buying tips provided by organisations like the ACCC, which are updated multiple times a week. These tips include information on the best times to buy petrol in specific cities and the use of fuel price apps and websites to find lower fuel prices in their area.
