|Aims to assist Victorian motorists understand and take advantage of the price cycles of petrol. You could save hundreds of dollars each year by simply filling your tank at the bottom of the price cycle. |
RACV's guide to petrol
Since world oil prices soared to record highs in 2000, Australians have had to dig deep into their pockets at the petrol bowser. The introduction of the GST on top of the Federal Fuel excise left most of us paying between 90 cents and $1 a litre.
After an unprecedented national campaign lobbying for fuel tax relief, the Federal Government agreed to review the way petrol is taxed and freeze the Federal excise at 37.7 cents a litre in Victoria. But costs are still high and, with GST on top of excise, if you wanted a $50 tank of petrol at $1 a litre you would be paying $23.40 into the Federal coffers.
What does it all mean? In the guide below we have tried to answer some of your questions.
How is petrol priced?
Why do prices fluctuate?
Your guide to petrol prices
How is fuel taxed?
How much are the high petrol prices costing Victorian motorists?
Are we any closer to fuel tax reform?
How is petrol priced?
The price of petrol in Australia is based on import parity, which means that even though the petrol you buy may well have been sourced from Australian oil, it is priced on the product price in Singapore plus freight, wharfage, insurance and converted into Australian dollars.
So the three main contributing factors that move the wholesale price of petrol up and down are the world price of oil, the petrol price in Singapore and the value of the Australian dollar.
By linking the price of petrol to the Singapore price the efficiency of that nations refineries is reflected in the Australian price which can be a good thing. However, increased demand in Asia can also push up our prices.
As Victoria operates under a legislated Terminal Gate Pricing (TGP) system the major oil companies are required to publicise their daily wholesale prices. These are provide on their web sites and by comparing the TGP with the retail price motorists can see when discounted fuel is being sold and should take advantage of the lower prices to fill up.
Why do petrol prices fluctuate?
In the petrol purchasing game not everyone is equal. For instance independent operators who purchase full tanker loads will buy at the Terminal Gate Price while franchised service stations will buy at a higher price.
Most motorists have no brand loyalty and buy purely on price. Large price boards at service stations allow motorists to shop around without leaving their vehicles. So price is all important and service stations that buy at the Terminal Gate Price tend to discount to attract customers.
The oil companies then have to price support their franchised operators so that they can compete. The discount war continues until the oil majors decide to stop price support and signal to the market that they have had enough and prices go up. With no discounts in the market both the oil companies and the service stations receive a very healthy margin.
There is a price cycle in the Melbourne metropolitan market, so RACV suggests motorists regularly monitor this site to see how prices move. If need be, change the day on which you fill your tank and take advantage of the discounts.
By shopping smarter you will save hundreds of dollars in fuel costs over the year.