Aussie Petrol Prices Rising, Could Be Much Worse

Aussie Petrol Prices Rising, Could Be Much Worse

Petrol prices are a major concern for most Australians when they set their budget. If you feel like you’re suffering at the bowser, here’s the hard data: the capital city price for unleaded petrol rose by eight cents per litre over 2010-2011, with an average cost of $1.32 per litre. But which petrol retailers are usually the first to lift prices?

Picture by Michael Spencer

The Australian Competition and Consumer Commission (ACCC) today released its annual report into petrol pricing in Australia. The price paid correlates closely with the raw price paid by refineries and movements by Australian currency. In other words (and I know some of you won’t want to hear this), you’re not being unreasonably gouged by your local service station, which makes an average profit per litre of around 2.2 cents. You’d certainly pay more in other parts of the world:

Petrol prices in Australia continue to be among the lowest in countries in the OECD, largely due to tax rates on petrol being lower in Australia than most OECD countries.

Here’s how the pricing for petrol typically breaks down (the ‘Mogas 95’ component is the raw oil cost):

Aussie Petrol Prices Rising, Could Be Much Worse

Despite our lower-than-much-of-the-world tax rates, prices have clearly risen. In the ACCC’s view, that’s down to factors outside the control of individual suppliers to a large extent:

Higher retail petrol prices this year reflected geopolitical tension in the Middle East and continuing strong economic activity in Asia, which led to stronger demand and higher crude oil prices during 2011.

The ACCC’s analysis suggests that the average household spends four per cent of its total expenditure on petrol. Many people stick to routines such as always buying on a particular day, to take advantage of well-recognised price cycles where the price will vary quite dramatically over a given period, something the average figure doesn’t directly highlight. This is an artificial phenomenon in that it doesn’t reflect variations in the raw cost of oil but is a deliberate marketing strategy:

Petrol price cycles are not responses to changes in cost but are the result of the deliberate pricing policies of the major fuel retailers. The price increases are generally led by BP or Caltex.

The phenomenon is not unique to Australia but is more pronounced here than elsewhere. Buying at the low end of the cycle makes sense, but analysis suggests the relevant day often shifts over time. So cheap Tuesday may have worked a year ago, but unless you check the price every single day and adjust your behaviour, you’re not always going to see the benefit.

The average cost is also higher in regional areas, something the ACCC acknowledges causes a lot of complaints. However, it seems unlikely that regulators will directly step in to further control fuel supply. As such, higher petrol prices are likely to remain a factor in your budget if you live outside a capital city.

In its announcement, the ACCC was also at pains to single out inaccurate oil price reporting in the mass media as creating unrealistic expectations:

Another issue of concern to the ACCC is the continuing quotation of the West Texas Intermediate (WTI) oil price. Consumers may see a change in the price of ‘oil’ quoted in the media and expect it to be reflected in the retail price. However, the quoted price is often WTI which is not relevant to Australia and references to it can provide an inaccurate picture to the public. The ACCC considers that the more heavily traded Brent or Tapis benchmarks better reflect the price that Australian refiners pay for crude oil.

Complaining about petrol prices is practically an Aussie tradition, and the finite nature of oil supplies means we’re never likely to see a reduction in either price or whining. What tactics have you used to cut your petrol bill? Tell us in the comments.



  • Catch public transport like a responsible person…My housemate cuts petrol costs by only allowing a set amount IE. $50 of petrol a week and once that is used he either walks or catches the bus. People need to stop driving everywhere anyway…atleast until we have sustainable fuel for our vehicles.

    • That approach might work well for you but it won’t work for everyone. What about those, like me, who don’t have easy access to public transport; where a journey using PT would take twice as long, and where there are no realisable cost benefits associated with using PT? Until such time as all these issues are resolved, particularly here in Brisbane, we have no realistic options other than to use our cars.

      • At the end of the day, it comes down to priority. I’m not suggesting you fit into the catagory (as it seem’s public transport is both slower, and as expensive as private transport in your area) – but a lot of people seem to have an expectation that public transport must be BOTH cheaper than private, and just as quick. Because many can’t have their cake and eat it too; they deem public transport unfeasible.

      • +1 to Brisbane public transport sucking.

        I had to use public transport for 9 days while my car was repaired (thanks idiot driver).
        Cost more than what it did in fuel each day AND took twice as long – and I still had to end up walking around 8kms round trip each day.

        If I didn’t have to pay for rego, insurance and fuel, the cost might have been on par, but I need my car for journeys other than work (ever tried to take public transport with a bass & amp? – plus all my family lives in NSW, it’s only 1hr 20mins by car, but by public transport…. no, just no.)

        How about better/more bike lanes? I’d love to ride to work, but I really think I’d end up in hospital from being hit – it would be a bit of a false economy….

    • Public transport is great, and one of the major factors in choosing where I want to live. But not everyone has that choice so they just have to bear the cost. As such, a tank of fuel lasts me a solid month so the cost barele affects me.

      I do think we could do with further PT development. Secure parking stations near major PT hubs would be a big step forward.

      • I used to catch the bus to work every day from a small village in the UK where I used to live, to the nearest city (approx 15 miles away). The journey distance was similar to the journey I take to work here in Brisbane. I was able to jump on the bus (which ran every 5 minutes) from outside my house; the journey took 30 minutes; the cost was approx $7.50 per week. **This was 24 years ago**.

        Here in Brisbane I have to walk 1.5Km to the nearest bus stop, the bus runs every hour, the journey takes 1.25 hours and the cost is approx $50 per week.

        Fiona, please don’t get me started on idiot Brisbane drivers!!!

      • Certainly agree about the downsides to public transport, more what I was saying is that this reliance on private transport is part of the problem. If we could magically widen our streets to accommodate safe bike lanes and add some reliable regional public transportation systems (that are quick) we would be set. Unfortunately we cant rely on magic so we can only do our best to possibly LIMIT the amount of private transport we utilize certainly this doesn’t work for everyone but I believe there are a great many commuters that could just as easily catch public transport as drive to work.

    • I often pay close to $1.60/L for 95octane, and normal unleaded isn’t much better, maybe $1.55.

      Seeing that massive tax amount in there makes me sick. People saying to use public transport and “be responsible” have never been late for work due to a bus, or have to drop off kids at daycare on the way, or pick them up when they are sick/hurt, or dont live 2km from a bus stop, and never have to leave their aircond offices during the day.

      If I was in London or Rome, where public transport is amazing and extremely affordable, I’d bus/sub it every day I could. When it costs $10/person/day ($100/wk for a couple!!) to get to work and back on a crappy bus, I’ll drive thanks. I’d ride a bike before I relied on the overpriced cattle transport where I live.

      It works out cheaper to drive if your employer provides parking. Fuel prices go up, so does public transport prices. If everyone stopped paying rego on cars and used buses, public transport would go up dramatically, people dont realise that. Public Transport relies on car registration to have roads to drive on…remember that when you’re being all righteous about catching a 30m long, diesel belching bus, and I’m in my 40mpg hatch. 😉

      • Not being righteous mate – circumstance will always dictate transport, I would prefer a world where people could all use public transport to get to work but that’s not the one we live in, doesn’t mean I cant express my desire.

    • This approach doesn’t work for me, I don’t have much access to public transport, but I did catch the train to work everyday for the past 4 years. But I have since stopped because I found that it was costing me less to ride my motorbike, even after taking regular servicing and maintenance costs into account AND I am now shaving off an hour and a half travel time each day even with the abysmal traffic, also my motorbike is always running on time and is never cancelled.
      I would love to solely rely on public transport, but the government just hasn’t made public transport funding a priority.

    • I would think $12 of fuel money would get you further, and in a lot less time, then it would cost to buy a $12 train ticket.

      If you get paid $20 per hour, and to get to work by car is 30 minutes quicker then public transport, you essentially are making $10 extra just by driving, which makes taking public transport more costly.

  • I still haven’t found a decent Android app that will one-button tell me the cheapest petrol within (say) 5km of my present location.
    Am I just not looking hard enough?
    I’ve also found Motormouth’s coverage a bit patchy (It doesn’t do the North Shore past Lindfield, and doesn’t do Pennant Hills Rd/Epping Rd until North Ryde) – Is there any better source of petrol price data that includes the Pacific Highway Lindfield-Hornsby and Pennant Hills Rd Hornsby-Parramatta?

  • Petrol pricing locally seems largely static, and constantly high. Around Launceston it’s stayed steady at 149.9c/L for at least the last 3-4 months, and unlike other parts of Australia, we don’t have a weekly price discount cycle.

  • Odd, it seemed to be getting cheaper around my area just in the last week. Last night I noticed it at a Caltex for 1.29l discounted to 1.26. I live in Victoria, in a busy rural area.

  • The biggest con-job came with the imposition of the Fuel Excise. Call it a different name and it’s not a tax, the government said. So as well as paying GST on fuel, the hapless motorist found himself paying another tax that was not supposed to be applied. The problem with the fuel excise is that it is applied to the price of gasoline plus GST, so it compounds the amount by taxing a tax.

    It is interesting to note that some of these indirect taxes are actually illegal. Under current legislation, applying a tax on a product or service that is already taxed is against the law, so levying an excise on fuel that is already taxed by GST is blatant double-dipping and illegal, but the Federal Government has been getting away with this scam since 2000.

    There are a number of other taxes that are obviously illegal, such as the Luxury Car Tax. Under the Australian Constitution that supersedes any other law, a tax on a tax is illegal, therefore a High Court action by all concerned parties should be launched to force the Federal Government to not only immediately stop applying the Fuel Excise but to compensate all motorists for the years that they have paid this illegal tax.

  • Fluctuations of 10c p/l in a “rural” area are quite common around here (regional Victoria). I can drive from one side of town to the other (about 2-3km), come across 3 petrol stations and get fluctuations of anywhere up to 10c a liter.

    Same fuel (ethanol blend), three different companies (Caltex, Shell, BP), three totally different prices by more than a few cents. Still not sure what to think.

    • I have the same thing in the country town where I live too. It’s more about picking your petrol station rather than the day. I’ve yet to find any real pattern in prices vs days in the petrol station I use. One thing that is consistent is that petrol will always be cheaper in the nearest regional centre. Whenever I drive in there, I always fill up my tank.

      I’d love to use public transport for my day to day use, but there simply is none in my town. Health reasons prevent me from relying on cycling. Fortunately most of my driving trips are fairly short. I am on the regional rail line though, which is fairly cheap and reliable (if not the most regular), so for trips to Melbourne, I will happily use that.

      • Same thing where I live, there’s a BP that is sometimes 20c al litre! more expensive than the shell 5kms away. I am astonished by the price disparity.

  • My commute to work is fairly short these days, but not possible from public transport so fuel prices rarely register for me (I only have to fill up about every 2 weeks) but for 10 years before that I had alternated between public transport and private car.

    One thing I would like to say to all these hippy’s telling EVERYONE to catch public transport and it will fix everything. What do you think would happen if one day everyone DID decide to catch public transport? Our system is so outdated, insufficient and inefficient if more people did start using it we would have chaos – especially out West / South West. You get one busy morning and the whole thing collapses.

    Not to mention that our whole society is generally geared against it, it would take a massive shift in business’ to allow for public transport to become a real option for people – staggered or flexible work times, shorter work days, monetary incentives for using public transport, more dedicated public transport lanes etc.

    When I worked in North Sydney it was an 1:40 drive or 2:20 train… YOU might not think its that big a deal an extra 40 mins but after a 10 hour day and not getting one extra cent for the 5 hours travel you really think anyone would chose public transport over a car?

    It really irks me these blanket statements, think about it for a second….

  • I own a 1L car.. it has a 35L tank and the fuel efficiency it gives allows me to get around 550 to 600 km out of a full tank. I just took the car, fully loaded with camping equipment and food and passenger for a 3 hours drive to the camping site. Lots of highway driving (even up and down Bulli Pass near Wollongong), through dirt roads and after it rained for a day back through the same dirt roads that were muddy.. no problem at all. I was overtaking cars going up Bulli Pass… (for those that don’t know, it is a very steep, long winding pass up the mountain between Wollongong and Sydney)… So that was my solution to easing the petrol costs.

  • “your local service station, which makes an average profit per litre of around 2.2 cents” I call B.S. on this having recently worked at a servo and seeing the invoices.That 2.2 cents would only be thae absolute minium and only on the “discount” days tue, wed, before they gouge away and jack up the price on thur, just in time for payday.Many a time the invoice has read say $1.30 but the price is $1.40+ then might go down for a day or two bujt up again.I would say an average profit of at least 5 cents proberly more.

Show more comments

Log in to comment on this story!