Savvy drivers can game the petrol-price cycle and save themselves up to $500 on fuel each year, according to a new report from the Australian competition watchdog.
A report released by the ACCC on Thursday found the price cycles used by petrol stations to maximise profits in Australia’s major cities can be gamed to reduce the average driver’s fuel bill by hundreds of dollars.
ACCC deputy chair Mick Keogh said that while the price-cycle system isn’t illegal, it still “infuriates drivers” and can see many paying far more for their fuel than necessary.
“It’s not uncommon for drivers to notice prices jumping 20 cents a litre or more in a very short period of time,” Mr Keogh said.
“The price you see being charged on the way to work can be very different on the way home.”
For drivers in Perth, paying the lowest price each week is as simple as buying fuel on Mondays, owing to the city’s unique weekly price cycle, but for Adelaide, Brisbane, Melbourne and Sydney, things are a little more difficult.
However, using the Australian Institute of Petroleum’s historical pump price data, The New Daily was able to establish that prices in these cities bottom out on Sundays, with the gap between troughs lasting an average 3.25 weeks in Adelaide, 4.5 weeks in Brisbane, 4.25 weeks in Melbourne, and 4 weeks in Sydney.
All in the timing
The length of a price cycle, measured from from the price’s lowest point (or ‘trough’) to its next-lowest point, varies from state to state.
The ACCC found that drivers who fill their tanks during each price cycle’s trough will save between $150 and $520 each year (depending on where they live), based on a driver who fills up a 50-litre tank once a week.
The ACCC report said the best way for drivers to cut their fuel bills is to track the price cycle using some of the many fuel-price data sites and apps available, and fill up during the lulls.
Drivers can follow the cycle using services like the ACCC’s own petrol price cycle page, fuel price comparison website MotorMouth, the New South Wales government’s FuelCheck website, or Western Australia’s equivalent FuelWatch to monitor for the cycles’ low points.
These websites allow consumers to see where in the price cycle retailers in their city are at, and the ACCC website even includes advice specifically on when to buy.
Buying outside of the troughs
Motorists outside of Perth are faced with between 36 and 40 weeks a year without a trough to buy in, but the ACCC’s report found that drivers can still save money during cycle increases – but they’ll have to shop around.
“At these times, motorists could have used fuel price websites and apps to find the lowest-priced retail sites,” the report said.
These savings – based on the assumption that a motorist filled up once a week during weeks without a price-cycle trough and that the variation between the lowest-priced and highest-priced retail sites was constant throughout the year – can be used in tandem with buying during the troughs to drastically reduce fuel costs, the report said.
The report also discovered that major brands have a tendency to increase the price of their fuel faster than smaller, less-known brands.
“The analysis of price increases by major brand in the June 2018 price cycle in Sydney indicates that some brands, such as Coles Express and Woolworths, were relatively quick to increase their prices, while smaller independent brands (such as Metro Fuel) and the independent retail sites generally delayed increasing prices,” the ACCC said.
In fact, Coles Express was on average the most expensive retailer in the five major cities, while independent chains – United in Melbourne and Brisbane, Speedway in Sydney, Liberty in Adelaide and Vibe in Perth – were “the lowest-priced major retailers in each of the five largest cities”.