Fuel price forecast explained
Understand reported station prices, city projections, national averages, official WA quotes and the limits of model estimates.
How Fuel Prices Work in Australia 2026
Plain-English guide to how petrol and diesel prices are set in Australia: crude oil, Singapore wholesale benchmarks, AUD/USD, excise, GST, freight, competition and local cycles.
By FuelRadar Australia2 min read
Quick answer: what sets the fuel price?
The price you pay at the pump is built from several layers: crude oil, refined petrol or diesel benchmarks, the Australian dollar, fuel excise, GST, freight, terminal and wholesale margins, then the retailer margin at the station. The final number also depends on local competition and the price cycle in your city.
1. Global oil and refined-fuel benchmarks
Australian petrol and diesel prices are influenced by international oil markets and refined-fuel prices in Asia. Crude oil is only the starting point. Retailers buy finished or blended fuel through wholesale channels, so refined-fuel benchmarks and terminal gate prices are closer to the wholesale cost that eventually reaches the price board.
2. The Australian dollar
Oil and refined fuel are generally priced in US dollars. When the Australian dollar weakens, importers need more Australian dollars to buy the same fuel. That can push local wholesale costs higher even if the global oil price is flat.
3. Excise, GST and wholesale costs
Fuel excise and GST are built into the price. Wholesale costs include the product cost, storage, transport and terminal margin. Those costs change more slowly than the retail price cycle, but they create the baseline that retailers price from. See the current excise rate and how much of each capital city’s litre is tax.
4. Freight and location
Fuel must move from terminals to stations. Transport distance, local supply, regional demand and station volumes all affect the delivered cost. This is why regional towns can sit above capital-city prices even when the national wholesale market is stable.
5. Retail competition and price cycles
The biggest short-term swings come from retail behaviour. In many capital cities, petrol prices jump sharply during a reset, then fall as stations compete for customers. Nearby suburbs can differ because some areas have more independent stations, stronger supermarket competition, or a cluster of retailers that discount harder.
How to use this before you fill up
Start with the local station price rather than a national average. Search your suburb, choose the fuel grade, compare update time and distance, then check the price cycle. If prices are near a peak, buying only what you need may beat filling the whole tank. If prices are near a low, it can make sense to fill more.
Common questions
Why do petrol prices change so quickly?
The fastest changes usually come from retail price-cycle resets and local competition alongside global oil. Wholesale costs set the baseline, but retailers can move pump prices sharply during a reset.
Why are nearby stations different prices?
Nearby stations compete in different micro-markets. Brand strategy, traffic, convenience, local competition and update timing can all create different prices only a few kilometres apart.
Does a lower oil price mean cheaper petrol today?
Not immediately. Global and wholesale changes usually flow through over days or weeks, while station prices can move with the local retail cycle today.
