War in the Middle East has already sent the price of petrol up, but a top motoring body says it has risen too soon, and service stations are overcharging customers "big time".
Fuel prices are already on the rise across Australia, amid conflict across the Middle East that has closed a shipping lane used to transport 20 per cent of the world's oil supply.
However, the NRMA motoring organisation says fuel prices in Australian capital cities have risen too sharply, too soon, and has accused service stations of price gouging while using the disruption as an "excuse".
While Australia sources much of the crude oil used in its petrol and diesel from Asia and the Americas, rather than the Middle East, the effective closure of the Strait of Hormuz between Oman and Iran has driven up the price of crude oil globally.
The price per barrel has increased by about US$10 in a week, data from the Australian Institute of Petroleum shows, across a variety of crude oil metrics applicable to Australia and overseas regions.
NRMA spokesman Peter Khoury told Drive fuel prices have already begun to rise, before the seven to 10 days it typically requires for increases in crude oil prices to flow onto local bowsers.
The organisation has accused retailers of "using the Middle East crisis as an excuse to jack up margins," and that petrol prices in major capital cities have "far exceeded the price expected for the top of their price cycles".
Data sourced by the NRMA from its petrol-price tracking app yesterday shows half of Melbourne's service stations charging at least 219.9 cents per litre for regular unleaded, and half of Sydney locations charging between 217.9 and 223.9 cents.
It said the average price for regular unleaded petrol in Sydney (209.5c/L), Melbourne (207.7c/L) and Brisbane (210.2c/L) is far above what is expected, while Adelaide (185c/L) and Perth (189.1c/L) "remain competitive".
Fuel prices in Sydney, Melbourne, Brisbane, Adelaide and Perth follow cycles, where retailers slowly discount fuel over days and weeks before it bottoms out, and prices surge by 20 to 40 cents in a short space of time.
"At the top of the cycle ... the 50 per cent [of Sydney/Melbourne service stations mentioned above] ... were already 60 cents a litre higher than the wholesale price before the prices were meant to start to come down again, and then obviously it all kicked off in Iran," Khoury told Drive.
It typically takes seven to 10 days for changes in global crude oil prices to flow onto Australian bowsers, as cost increases are typically passed on once the fuel is restocked at the pump.
"It can vary a bit depending on the servo. But yeah, these servos are overcharging big time."
He added that at least 12 per cent of Sydney fuel stations, and 25 per cent of Melbourne locations, are doing "the right thing", still below 189.9 cents per litre for regular unleaded.
Extreme estimates have forecast an increase in fuel prices of 30 per cent, if the conflict continues and the Strait of Hormuz does not reopen fully.
Khoury said the 'wholesale' price of petrol has risen by about 10 cents since the conflict began – to just over $1.60/litre – which is "where we would expect the prices in Australia to go up."
Khoury said "we need to see a de-escalation in the Middle East and that supply chain to be readdressed" before prices drop.
Should crude oil prices fall, he said it should take "seven to 10 days again" for Australian drivers to feel the impact, but that "they [service stations] put their prices up very quickly and they drop them very slowly."
Motorists are urged not to panic-buy fuel in anticipation of further increases, and use price-tracking apps to find the cheapest petrol and diesel near them.
Crude oil used to produce Australian petrol and diesel comes from countries close to home, but it is still affected by the Middle East.
"Our crude mainly comes from the US, Malaysia,, some from Korea, Vietnam. A lot of it is regional, but the price is not regional; the price is global," Khoury said.
"... The Middle East sneezes, the rest of us catch a cold."
Alex Misoyannis has been writing about cars since 2017, when he started his own website, Redline. He contributed for Drive in 2018, before joining CarAdvice in 2019, becoming a regular contributing journalist within the news team in 2020. Cars have played a central role throughout Alex’s life, from flicking through car magazines at a young age, to growing up around performance vehicles in a car-loving family. Highly Commended - Young Writer of the Year 2024 (Under 30) Rising Star Journalist, 2024 Winner Scoop of The Year - 2024 Winner
