Why Are We Paying $2.15/L When Oil Is “Low”
A moment from this Weekly Wrap will have resonated with a lot of Australians: WTI crude oil was mentioned as being around $US60 per barrel, yet filling the car still cost $AUS140 with petrol sitting at roughly $2.15 per litre at the pump. It’s one of the most frustrating parts of cost-of-living pressure — when global prices look like they should be easing, but household bills don’t seem to follow. The key thing to understand is that crude oil is only one part of what you pay for fuel. In Australia, petrol prices include refining, shipping, wholesale pricing structures, and retailer margins, plus taxes layered over the top. That means the pump price doesn’t move neatly in line with a single oil price chart.
Another huge factor people overlook is the Australian dollar. Oil is traded globally in US dollars, so even if crude stays steady, a weaker AUD can push local fuel prices higher. Add in fuel excise, GST and the reality that retail pricing often adjusts in cycles rather than instantly, and suddenly the gap between “oil prices” and “petrol prices” makes far more sense — even if it still hurts. The practical implication is that petrol behaves like sticky inflation. It can spike quickly, and it can stay elevated longer than we think, which makes it a household budgeting challenge rather than a short-term inconvenience.
Or maybe the cynic in us simply calls it as it most likely is. Why are they charging the punters so much? Answer – Because they can! It wouldn’t matter what the price per barrel is, there is a long weekend coming up which means prices will always go up. Hang in there, we should pick up some reprieve in a week’s time.
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