How petrol prices are set
in Australia

Australia doesn't set its own petrol price

Most Australians assume petrol prices are set locally — by oil companies, supermarkets, or government policy. In reality, about 80% of your petrol price is determined before the fuel ever reaches Australia.

Australia imports the majority of its refined petrol from Singapore, where large regional refineries process crude oil and sell finished product on the spot market. The benchmark price for this fuel is called Singapore MOGAS 95 (Motor Gasoline 95 octane), and it's quoted in US dollars per barrel.

When Singapore MOGAS prices rise, Australian wholesale fuel costs follow — typically with a one to two week lag as shipments make their way here.

The role of Brent crude

Singapore MOGAS itself is derived from crude oil. The dominant global crude benchmark is Brent crude, priced in US dollars per barrel on the Intercontinental Exchange (ICE). Brent captures the geopolitical and supply-demand dynamics that determine the raw material cost for refiners.

Singapore refiners buy Brent (or similar grades), refine it, and sell MOGAS. Their margin — the crack spread — reflects refining costs and regional supply-demand. When Brent rises, MOGAS usually follows within days. When Brent falls sharply, MOGAS falls too, though not always as quickly.

This is why you'll notice petrol prices in Australia often start rising a week or two after a spike in oil news — the signal travels from Brent to MOGAS to terminal gate to retail.

Why the Australian dollar matters

Singapore MOGAS is priced in US dollars. Australian importers must convert AUD to USD to buy it. When the Australian dollar weakens against the USD — say, from 0.65 to 0.62 — the same barrel of fuel costs more in Australian dollars, even if the USD price hasn't changed.

A 5% drop in AUD/USD adds roughly 6–10 cents per litre to the import cost of petrol, depending on the current Brent price. This is why petrol prices can rise even when global oil markets are flat — a weakening Australian dollar is doing the damage quietly.

Most petrol price apps don't factor this in. They track cycle patterns in your city but don't know whether this week's cycle trough will be 5 cents higher than last month's because the AUD has softened.

The import parity formula

The import parity price is the estimated cost of delivering refined petrol to an Australian terminal. It combines:

• Singapore MOGAS spot price (USD/barrel) converted to AUD/litre
• Shipping and insurance: roughly 2–3 cents per litre
• Wharfage, storage, and distribution: roughly 5–8 cents per litre

On top of the import parity price, every litre of petrol sold in Australia includes:

• Fuel excise: currently 48.8 cents per litre (indexed twice yearly to CPI)
• GST: 10% applied to the total of all the above
• Retail margin: typically 8–15 cents per litre depending on the station and market competition

Add these together and you get a retail price that closely tracks what you actually see at the bowser — usually within 5–10 cents, with the gap being the retailer's margin.

The local price cycle

On top of the import cost, Australian metro cities — particularly Sydney, Melbourne, and Brisbane — have a well-documented retail price cycledriven by competition between service stations.

The cycle works like this: independently owned stations aggressively discount to attract volume. Branded competitors follow. Prices fall to a trough, then one major retailer raises prices sharply, others follow, and the cycle repeats. In Sydney and Melbourne this cycle runs roughly every 6–8 weeks. In Brisbane it's more like every 2–4 weeks.

The trough is the cheapest point in the cycle — the ideal time to fill up. The peak immediately follows, often 15–25 cents higher per litre. Knowing where in the cycle your city currently sits can save a tank-filling household $300–500 per year.

Standard price apps are good at identifying the trough. What they can't tell you is whether this month's trough will be at 175c or 195c, because that depends on oil markets. That's what PetrolCast adds.