Australia accounts for approximately 1.1 per cent of the world’s consumption of oil per day. We don’t have large fuel reserves, so much of our crude oil is imported, and that oil is subject to global price variations.
Australia imports 60 per cent of its fuel, with 27 per cent of its crude oil sourced from Malaysia.
To maintain parity with our suppliers, local wholesale prices closely follow the trends of the international price of refined petrol (regular unleaded), the benchmark known as ‘Singaporean Mogas 95’. The international cost of refined petrol accounts for 41 per cent of the price at the pump.
The value of the Aussie dollar also plays a part, and fluctuations in its value next to the US dollar can also affect the price according to the international benchmark.
The Australian Government levies a fuel excise on petrol and diesel that, when combined with GST, represents up to a quarter of the retail price for fuel. The rationale is that the funding is then reinvested in transport infrastructure projects.
The AAA outlines how this is calculated and disbursed.
Area - Prices can also differ between cities and regional areas, with prices between regions varying up to 3.3 per cent.
Maintenance - Finally, there are retailer operating costs such as transportation, freight, site maintenance, insurance, power, storage, wages, and profits to consider when determining petrol prices.