Drivers across the country have noticed the skyrocketing cost of petrol, which has surpassed $2 in every capital city around Australia.
An expert confirmed retail fuel prices are the highest the country has seen in more than 20 years, and residents everywhere feel the sting of the browser in the middle of a cost of living crisis.
We spoke to an expert to answer our burning questions about the best time to buy petrol, how to save money while filling up, and when prices finally fall.
Why is fuel so expensive?
The perfect storm of the Covid-19 pandemic and the war between Russia and Ukraine has pushed fuel prices to their highest level in over 20 years.
CEO of the Australasian Convenience and Petroleum Marketers Association (ACPMA), Mark McKenzie, said the price of petrol is rising significantly because of the interrupted global supply chain.
“The factors pushing up fuel prices in Australia have nothing to do with the Australian market,” he said.
Camera IconAustralia’s petrol prices are now surpassing dizzying heights. Richard Gosling Credit: News Corp Australia
“They continue to be the rising global oil price and the shifting sands of the Australian/US dollar.”
He said “supply has been chasing demand” since the oil demand fell by 55 percent during the pandemic and suppliers halted production. Then the war involving Russia, one of the world’s biggest oil suppliers, effectively eliminated 10 percent of the global oil supply.
“We’re continuing to see trading market speculation on where the price will be in the future, and that keeps driving prices up at the moment,” Mr. McKenzie said.
What is the government doing to help?
After fuel prices reached their highest levels in 14 years, the former federal government stepped in to halve the tax Australians pay for fuel.
However, reducing the fuel excise to 22.1c per liter is only a six-month stopgap. It was implemented in March and will expire in September when the tax paid on fuel will return to 44.2c per liter.
While the excise cut caused fuel prices to fall drastically in the weeks after its announcement, petrol prices have rebounded to record highs.
The ACCC noted regular unleaded petrol prices soared by 46c per liter between mid-April and mid-June. According to data from Fuel Price Australia, the cost of petrol is just a cent shy of the peak, which prompted the government to intervene.
How do the cities compare?
The Australian Institute of Petroleum data shows prices are higher than ever across the country.
For the week ending on June 19, the nation’s capital had the highest petrol price at 226.5c per liter, followed by Sydney with 222.6c per liter.
Camera IconEvery capital city in Australia has seen fuel prices soar past $2 a liter. Brenton Edwards Credit: News Corp Australia
Adelaide’s fuel price wasn’t far behind at 221.2c per liter, trailed closely by Brisbane with 220.2c per liter. Melbourne’s fuel is priced at 217.1c, while Perth has slightly cheaper energy at 214.8c per liter.
Hobart has the nation’s second cheapest petrol prices at 209.6c, but Darwin drivers get the best bargain at 205.7c per liter.
How high will petrol prices go?
According to Mr. McKenzie, “it’s anybody’s guess”.
The petrol consumer expert said average petrol prices are the highest Australia has experienced for over 20 years. Regular unleaded petrol now costs 30 percent more than it did six months ago, with drivers paying at least $23 more for a tankgasoline.
Mr. McKenzie said the world was in an “extraordinary situation” with its first pandemic in 100 years and the biggest European war since WWII.
“You put those factors together, and it’s almost impossible to predict where the price will go from here,” he said.
“The only thing that’s certain at the moment is the volatility.”
The bill at the browser will depend on the international oil market. Today, oil prices fluctuate between 3 and 5 percent daily, which Mr. McKenzie said was “unheard of”.
When will prices drop?
Unfortunately, the cost of petrol doesn’t look likely to fall anytime soon.
With the current unpredictable vacillations in the oil price, the CEO of ACPMA said prices would continue to rise.
Camera IconPeople are paying record-high prices for fuel in Australia. NCA NewsWire / John Gass Credit: News Corp Australia
“While supply and demand stay as tight as it is at the moment, all that we can see in the future is upward pressure,” he said.
“Perhaps not as steep as we’ve seen in the last couple of months, but still incrementally upwards.”
He said the lack of an international consumer watchdog made it difficult to compel international oil suppliers to increase production.
“These prices will only drop when we get something that starts to either increase supply … or retreats demand,” he said.
While it sounds very pessimistic, Mr. McKenzie warned this is uncharted territory. He said there could be a possibility of the oil market rebalancing, but it would require significant investment.
How do I save money on fuel?
As we may be stuck with soaring petrol prices for some time, Mr. McKenzie offered tips for saving money when filling up.
First and foremost, it’s important to shop around. Mr. McKenzie strongly advises downloading one of the many fuel price comparison apps, such as Fuel Check, Motor Mouth, or Petrol Spy.
Experts say that camera IconAustralians should use fuel price comparison apps to ensure they snag the best bargain. NCA NewsWire / Dan Peled Credit: News Corp Australia
The petrol consumer expert said the apps are “key” to navigating the capital city price cycles, where the petrol price can vary by 20c over a couple of weeks. By watching the app price, drivers can ensure they’re not paying to fill their tanks at the most expensive time of the price cycle.
Mr. McKenzie also warned the fuel price could vary widely from petrol station to petrol station.
“The price on any given day might vary between 10c and 12c, so it’s worth shopping around,” he said.
By being savvy, drivers could save an average of $5 when filling an average 50L tank. The petrol industry is working with the government to ensure the petrol data is timely and accurate, so the apps are a good resource for those feeling the pinch of rising costs.