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Why are petrol prices so different across the same companies?

Petrol prices in Australia have been leaving drivers scratching their heads lately. 

One petrol station might charge $2.26 per litre, while just a short drive away, another station sells the same unleaded fuel for $1.64—a difference of 62 cents. 

So, why is there such a huge price gap?

On Friday morning’s episode of The Briefing, we talked to Peter Khoury from the National Roads and Motorists’Association (NRMA) to break down the mystery of fluctuating fuel prices.

Khoury explains that petrol prices are influenced by several factors, including international oil prices, the value of the Australian dollar, and local market competition. 

These elements cause price fluctuations that can vary from one station to the next—even for the same brand.

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“I would suspect that those prices were taken at a snapshot when the price cycle in Sydney was just about to turn or had already turned. So what would happen is that you would see those prices, very low at one place, significantly more expensive than other places,” he said.

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The global supply and demand for crude oil play a significant role. 

When global oil prices rise, petrol prices follow suit, but it can take up to two weeks for these changes to reach Australian retailers. 

“The reality that we face in this country, no matter where you live, is that the prices aren’t regulated and there’s nothing stopping service stations from charging whatever they want. And clearly from that example, they obviously do and then some.”

In response to these frustrations, the Victorian government has announced a new plan to help consumers find the best deals, including a daily price freeze and a tracking app. 

Subscribe to The Briefing, Australia’s fastest-growing news podcast on LiSTNR today. The Briefing serves up the latest news and deep dives on topics affecting you, all in under 20 minutes.