Petrol jumps 14 cents in a week: how the oil shock reaches the bowser
Petrol has jumped 14.3 cents a litre in Australia's major cities. The reason starts in international oil markets — but crude oil is only the first step in the journey to the bowser.
Australian petrol prices have moved sharply higher again.
The ACCC says average retail petrol across Australia's five largest capital cities reached 222.4 cents per litre on 16 September, an increase of 14.3 cents in one week. Diesel rose almost identically, by 14.2 cents to 267.9 cents per litre. In Sydney, petrol increased 16.6 cents to 224.8 cents.
The immediate cause is international markets. But the price of Brent crude oil does not simply translate directly into the Australian petrol price.
Australia's relevant international benchmark for petrol is Singapore Mogas 95 — the price of refined petrol in the Asia-Pacific market. Crude oil is its major input, but refinery capacity, product demand, shipping disruptions and refining margins can cause Mogas to move differently from crude.
That distinction is visible now. Between the weeks ending 9 and 16 September, Brent crude rose from US$107 to US$132 a barrel. Mogas 95 increased from US$130 to US$143. Converted into Australian cents per litre, Mogas rose from 114 to 126 cents — an 11% increase.
The Australian dollar matters too. International fuel is priced in US dollars, so a weaker Australian dollar amplifies an international price increase while a stronger dollar can cushion it.
From there, international refined-fuel prices feed into Australian wholesale prices. Average petrol terminal-gate prices across the five largest cities rose 13.7 cents to 219.8 cents per litre in the latest week. Retail prices then rose 14.3 cents.
Normally this transmission is not instantaneous. The ACCC says changes in international benchmarks can take around two weeks to work through the supply chain in major cities, while wholesale-to-retail changes typically take one to two weeks, largely because service stations change prices as stocks are replenished. Regional transmission can take longer.
Those are typical lags, not rules. During the initial March oil shock, the ACCC found some retail prices increased almost simultaneously with wholesale prices rather than after the normal delay. Petrol price cycles in Sydney, Melbourne, Brisbane, Adelaide and Perth add another layer of short-term volatility.
For inflation, the timing matters. The RBA estimates that a 10% increase in domestic fuel prices adds a little over 0.3 percentage points to headline inflation over one to two quarters. Higher diesel and transport costs can then feed indirectly into other prices over a longer period.
The oil shock therefore reaches consumers in stages — and the latest ACCC data show it is moving through the Australian pricing chain again.