Petrol costs us a fortune – although that cost has eased recently thanks to our falling Aussie dollar. For most of us though, transport costs are just behind housing and food in terms of biggest living expenses.
So what influences the cost of our petrol in Australia? The ACCC advises that fuel prices are influenced by a number of factors, with the significant ones being:
- The value of the Australian dollar relative to the US dollar – this affects both the price of crude oil and imported petrol as international benchmark prices are valued according to the $USD. A weaker Aussie dollar leads to higher import prices.
- Pricing decisions by wholesalers and retailers – the costs of transport, storage, salaries and other overheads that are incurred by both wholesalers and retailers also add to the cost of our fuel.
- Levels of competition in different areas – as with any industry, supply and demand will always play a part in determining pricing.
Then of course there are taxes. All fuel prices include 10% GST, and petrol and diesel also incur a fixed Federal Government Excise of 38.6 cents per litre – an amount that will increase progressively over time.
There’s a great graphic on the Australian Institute of Petroleum website, showing how the price we pay at the bowser is divvied up between the initial supplier, the government (the aforementioned taxes), the wholesaler and the retailer. Retailers don’t make a high profit margin on petrol – a reason why many service stations nowadays resemble mini supermarkets.
While it’s interesting information, it’s not much help if you need to fill up now! There are, however, a number of fuelwatch-type sites, such as this one set up by the Western Australia Department of Commerce. And of course, keep an eye on the advertised price on the way to and from work!