The fuel price cycle

If you live in Sydney and fill your petrol tank at a low point of the price cycle, and shop around, you will pay less than if you fill it near the peak. The ACCC estimated in 2018 that buying at the low point of the cycle could save around $175 a year in Sydney, $150 in Melbourne and Brisbane, $200 in Adelaide and up to $520 in Perth ¹⁸.

The ACCC has documented this cycle since the early 2000s. It occurs in Sydney, Melbourne, Brisbane and Adelaide, and also in Perth, where it is shorter: in 2025 a cycle averaged about a week in Perth, against 2.5 to 6.5 weeks in the eastern capitals ⁸. Perth has a government-mandated price transparency regime called FuelWatch. Victoria has had a daily price cap, set a day ahead, since 10 March 2026 ¹⁶¹⁷.

The ACCC’s response to a market failure that has persisted for more than two decades? Advice on its website about when to fill up.

01How the cycle works

The petrol price cycle is a textbook Edgeworth price cycle: a form of oligopolistic pricing behaviour documented in economics literature, including for Perth's petrol market ¹¹. It works as follows.

A small number of retailers set prices in a market where each can observe the others’ prices in near-real time. One retailer, seeking to gain market share, cuts its price below competitors. Competitors respond by matching the cut. The undercutting continues until prices reach a floor, usually close to the wholesale cost, at which point it becomes unprofitable to cut further.

At some point, one retailer restores its price to a higher level. Competitors follow, because the price transparency means each knows the others have raised prices and has no incentive to remain at the lower price alone. Prices spike. The cycle begins again.

The ACCC’s assessment is that this behaviour is not collusion: there is no evidence of an agreement between competitors to fix prices. Each firm is acting in its own rational short-term interest. The collective harm to consumers is not the result of deliberate coordination but of the structural conditions of the market: few players, high price transparency, captive demand.

Captive demand is the key word. Unlike a luxury good, you cannot stop buying petrol. You can time your purchase to avoid the cycle peak, if you know about the cycle, and if your schedule allows. Most drivers do neither.

Update, 7 October 2026. Reference 11, which pointed to The Conversation's home page, now gives a study of Edgeworth price cycles in Perth's retail petrol market ¹¹, and this section cites it. Correction: this section called it "the weekly petrol price cycle"; the ACCC gives cycles averaging 2.5 to 6.5 weeks in the eastern capitals in 2025 ⁸, so it now says the petrol price cycle. The subtitle also said the cycle “costs consumers hundreds of millions of dollars a year”; THE RORT could not find a source for that total, and the words have been removed.

Correction, 8 October 2026. The opening said the ACCC calculated that in 2023 a Sydney motorist buying 50 litres of regular unleaded each week could have saved around $407 over the year by buying at the low point of the cycle, with a range from around $242 in Brisbane to around $740 in Perth. The ACCC release cited ¹⁸ is dated 6 December 2018 and gives different figures: it estimated that buying at the low point of the cycle could save around $175 a year in Sydney, $150 in Melbourne and Brisbane, $200 in Adelaide and up to $520 in Perth. The opening, the figure and reference 18 now give those figures (the figure said around $407 and now says around $175), and the market structure section's correction note is updated to match.

02The market structure

The ACCC counts eight larger retail brands, which together accounted for around 74 per cent of national retail petrol sales in 2023-24: Ampol, bp, Chevron/Caltex, United Petroleum, 7-Eleven, EG Group, Coles/Reddy Express and On The Run. Smaller independent retailers sold the other 26 per cent, up from 18 per cent in 2017-18 ³.

On this outlet's reading, these larger brands set the price environment in the capital cities. The wholesale price is benchmarked to the Singapore Mogas 95 international price: the appropriate benchmark given Australia imports most of its refined fuel. The ACCC tracks the ‘gross retail margin’: the gap between retail prices and the international import parity cost, adjusted for excise and GST. At the peak of each cycle, gross retail margins are elevated above what the benchmark would imply.

Correction, 7 October 2026. This section said fuel retail in the capital cities is "dominated by four or five companies", named as Ampol, Viva Energy under the Coles Express brand, BP, EG Group and Costco, citing the ACCC's petrol section index. The ACCC's market composition report ³ names eight larger retail brands with around 74 per cent of national retail petrol sales in 2023-24, and independents with around 26 per cent; Costco is not among them. The section now gives the ACCC's figures, and the details only the index carried (Ampol as the largest fuel company, EG Group's 2019 purchase, Costco as a price anchor) were removed. The fact box said Perth "does not have the same cycle"; the ACCC reports that Perth has a cycle too ⁸, and the box now says so. The box, the opening, the subtitle and the key facts also described a weekly cycle in the eastern capitals with a Wednesday trough, a Thursday or Friday spike and a 10 to 20 cents per litre spread. The ACCC gives eastern cycles averaging 2.5 to 6.5 weeks in 2025 ⁸, and no source was found for the 10 to 20 cent spread, so it was removed; the box now gives the ACCC's cycle lengths, and the opening now gives the ACCC's estimate of what buying at cycle lows could save ¹⁸. This section also spoke of the peak of "each weekly cycle"; it now says each cycle. Reference 2, which carried the weekly description, is no longer relied on.

03Perth: prices locked a day ahead

Western Australia introduced FuelWatch, with its daily price notification requirement, in January 2001 ¹⁹. Under FuelWatch, fuel retailers must submit their prices to the government by 2pm each day. The submitted price is locked in for the following day: retailers cannot change their price during the day. The submitted prices are fixed for 24 hours from 6am, and FuelWatch publishes them by 2:30pm the day before ⁴.

FuelWatch has not ended the cycle. The ACCC reports that petrol price cycles occur in the five largest cities, Perth included; in 2025 a cycle averaged 1 week in Perth, against 2.5 weeks in Adelaide, 5 in Sydney, 6 in Melbourne and 6.5 in Brisbane ⁸. What FuelWatch changes is that a motorist can see tomorrow's price today, and that price cannot rise during the day ⁴.

Victoria has since adopted a version of it. Since 10 March 2026 ¹⁷, Victorian retailers must set the next day's maximum price by 2pm, and that cap applies for 24 hours from 6am; they may cut below it but not raise it ¹⁶¹⁷.

Correction, 7 October 2026. This section, headed "Perth: the state that solved it", said Perth "does not have the same weekly price spike cycle", that the ACCC "has noted FuelWatch as an example of effective price transparency regulation", that the eastern states had adopted no equivalent and that FuelWatch prices are published each evening. The ACCC reports that Perth has a price cycle, averaging 1 week in 2025, against 2.5 to 6.5 weeks in the eastern capitals ⁸; no ACCC statement endorsing FuelWatch as effective was found, so that sentence was removed; Victoria has capped each day's price a day ahead since 10 March 2026 ¹⁶¹⁷; and FuelWatch publishes the next day's prices by 2:30pm ⁴. The section, its heading, the figure, the opening, the subtitle and the image caption now say so. References 4 and 8, which pointed to the FuelWatch and ACCC home pages, now give the documents. A further correction: this section said FuelWatch was introduced in 2001 and "made mandatory in 2003"; a Senate committee report says it was introduced in January 2001 with its daily price notification requirement ¹⁹, and no source was found for 2003. The quoted ACCC advice said petrol is cheapest in Sydney on Tuesday or Wednesday mornings and in Melbourne on Monday or Tuesday; the ACCC's current advice is to buy at the low points of the cycle, to shop around as prices start to rise in Sydney, Melbourne and Brisbane ⁸, and the quotation now gives that (reference 14 is no longer relied on). The sentence "Fuel companies have consistently opposed mandatory disclosure in eastern states" was removed: no source was found for it.

Correction, 8 October 2026. The ACCC advice quoted in this section said that in Perth the cheapest day to buy is Tuesday. The ACCC page cited ⁸ does not give that advice; for Perth it says to use fuel price apps near a high point. The words are cut from the quotation, from the correction above and from the note at reference 14. The quotation also said the ACCC advises buying at the low points of the price cycle, before prices increase; the page does not carry that sentence, which is cut, and the quotation now gives the buying tips the page carried on 8 October 2026. Those tips are updated through the week, so they describe that date and are not standing advice. The correction above, which described the ACCC's advice as to buy at the low points of the cycle, is superseded by this note. This section also cited only ¹⁶ for the 2pm deadline for Victorian retailers; the Service Victoria page does not give a 2pm deadline, which is in the Premier's release ¹⁷, now cited alongside, and reference 16 no longer gives an 8:30am to 2pm window.

04The excise: a government toll that also rises automatically

Fuel excise is 48.8 cents per litre. Like Transurban’s tolls, it is indexed to CPI and rises automatically twice yearly. The government does not need to make a decision to raise it: it rises by default.

In March 2022, as the Ukraine war caused a global oil price spike, the Morrison government halved fuel excise, cutting it from approximately 44 cents per litre to 22 cents per litre for six months. The cut cost approximately A$3 billion in foregone revenue. Prices fell by approximately the excise amount. When the excise was restored in September 2022, prices rose accordingly.

The excise cut demonstrated that government has the capacity to reduce petrol prices rapidly and substantially when it chooses to. The structural problem (the cycle, the oligopoly market, the lack of eastern-states price transparency) was not addressed by the temporary cut. It returned in full when the excise was restored.

Meanwhile, fuel tax credits allow businesses to reclaim the excise paid on off-road fuel use. This credit is worth over A$9.5 billion per year: the largest single fossil fuel subsidy in Australia. The household driver pays the full excise. The mining company gets most of it back.

05Regional Australia: no cycle, just high prices

The price cycle, for all its consumer harm, at least offers urban drivers the option of buying at the trough. Regional Australians do not have this option.

Regional fuel prices are persistently above capital city prices. The ACCC monitors 190 regional locations and consistently documents the premium. The causes are structural: lower volume at each site (reducing the retailer’s purchasing power), higher logistics costs, less competition between fewer outlets, and no cycle benefit.

Regional Australians typically have longer average driving distances than urban residents. They use more fuel per household. They pay more per litre. And they have fewer alternatives (limited public transport, greater distances between destinations) that make driving discretionary.

The fuel premium is regressive in the same way that tolls are regressive: it falls hardest on those with the fewest choices.

06Twenty years of monitoring without teeth

The ACCC has monitored Australian petrol pricing for over 20 years. Its monitoring direction was extended for another 5 years in December 2025. Since late February 2026, when the Middle East conflict began, the ACCC reports that petrol price cycles have mostly not occurred in Sydney, Melbourne, Brisbane and Adelaide ⁸. Victoria adopted a daily price cap only in March 2026 ¹⁷. Regional Australians pay a persistent premium. The excise rises automatically. The larger retail brands, which sell around three quarters of the nation's petrol ³, have never faced structural intervention.

If it’s a rort, we cover it.

Correction, 7 October 2026. This section said the eastern states "have no FuelWatch-equivalent" and that "four to five companies" dominate fuel retail in each capital city. Victoria has had a daily price cap since March 2026 ¹⁷, and the ACCC counts eight larger retail brands with around three quarters of national petrol sales ³; the section and key facts now say so. References 9 and 12, which pointed to an ACCC section index and the Senate Economics Committee home page, are no longer relied on. This section also said "The price cycle continues"; the ACCC reports that since late February 2026 petrol price cycles have mostly not occurred in Sydney, Melbourne, Brisbane and Adelaide ⁸, and the section and summary now say so. The image at the head of this article no longer calls the cycle weekly, shows weekdays or a 10 to 20 cent spread, calls Perth stable, or leaves out Victoria's cap.