Lengthening petrol price cycles across Australia’s largest capital cities have resulted in Australian drivers being exposed to higher prices for longer periods, according to the NRMA.
The organisation’s analysis of 51 price cycles in Sydney since January 2019 has found that motorists have been exposed to some of the highest gross margins (gap between the wholesale and retail price) price for regular unleaded on record.
The final price cycle in 2023, which covered the Christmas and New Year holiday period, saw a record average gross margin of 21.5¢ per litre.
In 2019, the daily gross margin exceeded 30¢ per litre on only five occasions. It registered less than 5¢ per litre over 133 days and a negative gross margin over 41 days. The 2023 comparison was 30 days, 40 days and 13 days respectively.
Gross margins at the bottom of the cycle have spiked, too. In February 2023, margins at the bottom of the price cycle dropped below the wholesale price to -1.9¢ per litre. The margin reached a record 6.5¢ per litre at the bottom of the most recent completed cycle in Sydney in March.
The NRMA analysis also confirmed that longer price cycle left motorists more exposed to higher prices. Since January 2019, prices across 51 price cycles fell by only 1¢ per litre per day yet rose at more than twice the daily rate at 2.3¢ per litre.
It took the average price cycle in Sydney 26 days to fall from the top to the bottom of the cycle yet would “race” to the top of the cycle from the bottom in only 12 days.
Longer price cycles in Sydney, Brisbane and Melbourne have been a “major contributing factor” to Australia’s largest cities being among the most expensive.
NRMA spokesperson Peter Khoury says the fact that Brisbane margins in 2024 were almost three times higher than Perth’s and Sydney’s more than double highlighted the additional cost-of-living pressure felt by motorists in Australia’s largest capital cities.
“From prices going up at more than twice the rate as they fall, to higher gross margins and prices not falling as far as they should at the bottom of the price cycles in our most populated cities, it’s clear motorists are being let down by the chaotic nature of petrol prices,” he says.
“The NRMA has been concerned about families and businesses being over-exposed to higher petrol prices and the inflationary impact this has on our economy is clear.”
