News and Reviews

Prices of petrol, gas, fuel prices – how and why they fluctuate

June, 2012

If you’re interested in buying a new car, you’ll be wary of all financial aspects involved with buying one, including the ever fluctuating fuel price. If you’ve ever wondered why petrol prices fluctuate so much, you probably already know that it comes down to a number of different factors, both national and international. Today we’re taking a look at a couple of the influencing factors affecting how much we pay for fuel at the bowser. To learn more about the finances in buying a new car, have a look at our range of finance calculators.

What is petrol anyway?

Part of understanding why petrol prices fluctuate so much begins with understanding what it’s made of in the first place. Petrol is refined from crude oil, and it’s this crude oil which experiences huge fluctuations in prices every day. In fact, 90% of the cost of petrol comes from purchasing and refining the crude oil.

Other factors affecting the Price of Fuel:


One significant influence on gasoline prices are taxes, which vary dramatically both locally and international, and across different markets. According to the ACCC, there is currently a Federal Government Excise for petrol and diesel which is 38 cents per litre. The Government also applies a 10 per cent GST on the price of fuel.

Exchange rates

Since world crude oil prices are set in US dollars, another major factor which affects prices in the Australian petrol market is the conversion of the world price into Australian dollars via daily changes in the USA to AUD exchange rate.

Transport and distribution

Transport and delivery costs also bring up the price of petrol. There are costs associated with transporting the oil to a refinery, actually refining it, then transporting the refined product to distribution hubs and then retail locations (ie service stations).

Of course, these are just some of the many factors affecting fuel prices, but the main thing we all wonder to ourselves – how to find the best price. These days there are websites like WA Fuel Finder which help you find the best prices for a particular day, so keep an eye out and plan ahead. Also, keep common-sense tips in mind, like not waiting til the very last minute to fill your tank – that way, you won’t be forced all of a sudden to fill up at the very first petrol station you come across (which might not necessarily have the best prices!)

For a great, in-depth study of fuel prices and the factors that affect the cost of petrol at the bowser, check out this report by the Information and Research Services Parliamentary Library.


What are your tips for finding the best price of fuel when you’re out on the road? Comment below or contact us!


Get in touch

Visit us

49 Shepperton Road Victoria Park WA 6100

Get directions ›

General Enquiry

All fields are required

By submitting my enquiry, I agree to the John Hughes Group Privacy Policy.

Call Us

Parts & Accessories