What you're really paying for at the bowser

The cost of petrol to a Sydney motorist is $5,364 a year, says the NRMA. But understanding what you are really paying for, and why, as well as using some smart shopping techniques, might just save your wallet.

This is the big player in the fuel price game and probably the factor you can do the least about – the price is determined by global supply and demand.

Crude oil is also purchased in US dollars, according to the Australian Institute of Petroleum.

In other words, when the value of our dollar against the American dollar takes a dive, it can cost us more at the bowser. Global events can also cost motorists.

These are deliberate pricing policies by retailers, says NRMA spokesperson Peter Khoury.

For this reason, motorists are entirely at the mercy of the market, with the price cycles up to seven weeks meaning you can be paying hundreds of dollars a year more at the bowser (Australia’s cheapest cities for petrol, Perth and Adelaide, have price cycles of only seven and 17 days).

In Australia, petrol, diesel and automotive LPG prices are not controlled by the government; the market determines prices.

NRMA members can get real time push notifications through the app when the price cycle hits the bottom.

Every time you fill up, 50.6 cents per litre goes straight to the government, says the Australian Automobile Association (AAA).

Over the past decade, only 57 per cent of this has been reinvested in land transport projects, according to the AAA. Australian motorists will pay $67.6 billion over the next four years (2023-24 to 2026-27) according to the federal budget (October 2023).

More bad news, fuel tax is adjusted twice a year in line with inflation and, like alcohol and cigarettes, you pay tax on the GST as well, says Khoury.

Your local petrol station has its own costs like electricity, staff wages, insurance, and maintenance, and they need to make a profit.

You may also notice that when you stop at one of those open-all-hours-with-fast-food-on-site places on a busy highway, you pay higher petrol prices that build in extra services and conveniences.

A tip: major retailers like BP, Ampol or Woolworths are likely to be more expensive on average than independent ones like Metro Petroleum or Speedway.

It’s not an accident that fluctuations in fuel prices typically correspond to public and school holidays, according to the RACV, so fill up beforehand.

More competition also means lower prices which is why you’ll get a better deal if you shop around. You can compare real-time fuel prices by map with Petrol Spy Australia at Google Play Store. You can also use the NRMA’s Nationwide Fuel Finder for real time data of every service station.

And check out our other tips for saving fuel.

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