Maximising savings in the petrol price cycle
A new report by the Australian consumer watchdog has taken an in-depth look at how petrol price cycles work and how motorists can use them to their advantage.
The report found that buying at the low point of the cycle could save motorists in Sydney around $175 annually. Melbourne and Brisbane would save $150, while Perth motorists could save up to $520 per year.
Perth experiences regular weekly cycles whereas the length of price cycles are much longer in other cities, meaning there are less low points of the cycle.
Price cycles have been a longstanding feature of retail petrol prices in Australia’s five largest cities. They involve sudden, sharp increase in petrol prices, usually led by one or more retail sites, with other retail sites subsequently raising their prices. This is followed by a much slower decline back to lower price levels.
“While they are not illegal, the retailers’ use of price cycles to maximise profits really infuriates drivers as they can see no reason for them to exist,” ACCC commissioner Mick Keogh said.
“There’s a common perception that all retailers put their prices up or down at exactly the same time, but our research shows this isn’t the case, so if you see prices going up at one retailer, use an app to find another who hasn’t yet raised their price,” Keogh said.
The ACCC found motorists can save more money by choosing where they buy.
“Many people don’t realise there is also a significant difference between the cheapest and most expensive service stations throughout the price cycle, so purchasing petrol from those retailers that are consistently among the lowest-priced will save you money,” Keogh said.
“Favouring the best-priced retailers sends a clear signal to petrol stations about what they need to do to get your business. The more people who do this means the more pressure there is on retailers to compete aggressively on price,” Keogh added.