Key Takeaways
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Petrol prices go up when crude oil costs more or when supply is disrupted and less oil reaches the market.
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What you pay at the bowser covers the cost of crude oil, refining, distribution, marketing and taxes.
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Several factors — like global conflict, inflation, crude oil prices, demand, taxes and refinery limits — work together to drive petrol prices higher or lower.
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Even when prices fluctuate, simple money-saving habits like carpooling and budgeting can help you handle the hit to your hip pocket.
“Ugh… why is petrol so bloody expensive?” you mutter as you cough up $100 to fill up the tank.
Here’s the short, nerdy answer: Most of the time, petrol prices go up when the price of crude oil goes up. Lots of stuff affects the price of oil, but when we see big price swings, it’s usually because something disrupted the supply — things like wars, embargoes or natural disasters.
Sydney’s average for regular unleaded has climbed to around 244 cents per litre as of late March 2026 — up more than 84 cents per litre from the low point in February. Premium 98 is now sitting between 271 and 289 cents per litre across Sydney, with many servos pushing close to $3.00 a litre. So before you ditch the car and start cycling everywhere (unless you want to), here are some tips to help you feel less pain at the bowser.
What Makes Up the Price of Petrol?
When you pay at the bowser, you’re not just paying for the petrol itself. Several key parts make up the price of each litre:
What’s Driving Petrol Prices Right Now?
International Instability
Events on the other side of the world can still hit your wallet at the servo. Oil is a global market, so it doesn’t take much disruption to send prices climbing. About one-fifth of the world’s oil passes through the Strait of Hormuz — a narrow shipping route near Iran. When conflict threatens that passage, global supply tightens and prices go up.
And it doesn’t stop at the bowser. Higher oil prices drive up diesel costs too, which means it’s more expensive to move goods around the country — and those costs eventually show up in the price of everything at Woolies or Coles.
Inflation
The Reserve Bank of Australia (RBA) aims to keep inflation within a 2–3% target band. When global oil markets spike, the effect flows through quickly to the bowser — and because fuel is embedded in the cost of transporting goods, it amplifies price rises across the broader economy.
Crude Oil Prices
Wholesale prices for unleaded petrol hit a national average of 161.2 cents per litre in early March 2026 — up 6.8 cents in a single week — with the NRMA warning that wholesale prices were approaching record levels.
That’s where OPEC+ comes in. The Organisation of the Petroleum Exporting Countries (OPEC+) is a group of 23+ nations that collectively decide how much oil to produce. In January 2026 alone, OPEC+ production fell by 439,000 barrels per day due to infrastructure failures — squeezing supply and pushing prices higher.
Travel Demand
School holidays, long weekends and peak travel seasons all push petrol demand up. Prices in Australia are also influenced by the petrol price cycle — a pattern common in Sydney, Melbourne and Brisbane where prices rise sharply then gradually fall over a 4–6 week period. Knowing where you are in the cycle can save you real money.
Taxes & Excise
The federal government collects a fuel excise of 52.6 cents per litre as of 2025–26 — a flat charge on every litre, regardless of the crude oil price. Some politicians have called for a temporary halving of the excise, which would save motorists around 25 cents per litre, similar to the excise cut introduced in March 2022.
Prices also vary by location. By late March 2026, Sydney’s average for regular unleaded had reached around 244 cents per litre, while regional NSW averaged closer to 230 cents per litre. For Premium 98, most metro servos are pricing between 282–289 c/L, with cheaper independent and unmanned stations offering it from around 271 c/L. Where you fill up can genuinely save you 15–20 cents per litre.
Refineries
Australia has very limited domestic refining capacity, making us heavily reliant on imported refined fuel. When supply is disrupted overseas, we feel it quickly. In March 2026, the federal government lowered diesel standards for six months to allow more fuel into the domestic market as service stations began running dry.
Will Petrol Prices Come Down Soon?
That’s the million-dollar question — or at least the $100-tank question. A few things that could bring prices down:
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Increased production from OPEC+ nations
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De-escalation of international conflict
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A temporary cut to the federal fuel excise
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A stronger Australian dollar (crude oil is priced in USD)
But if conflict continues and supply stays tight, prices could remain elevated for some time. The best move is having a solid plan for your money so you’re ready regardless.
How to Save Money on Petrol
High petrol prices are a pain — but there are things you can do right now to soften the blow.
1. Use apps to find the cheapest prices nearby.
Apps like Petrol Spy, GasBuddy and your state’s official fuel price checker (e.g. FuelCheck in NSW, FuelWatch in WA) help you find the cheapest servo in your area without driving around burning more fuel to look for it.
2. Know the petrol price cycle.
In cities like Sydney, Melbourne and Brisbane, prices follow a predictable rise-and-fall cycle every few weeks. Fill up when prices are at the bottom of the cycle — typically mid-week — and you can save 15–25 cents per litre compared to buying at the peak.
3. Combine your errands into one trip.
Instead of making five separate trips to Bunnings, the supermarket and school drop-off, plan a single loop. It saves fuel and your sanity.
4. Carpool.
Carpooling to work, footy training or the school run is a great way to split fuel costs and build a bit of community while you’re at it.
5. Drive efficiently.
Smooth acceleration, maintaining tyre pressure, and using cruise control on the highway can meaningfully improve your fuel efficiency. Less fuel burned = fewer trips to the bowser.
6. Adjust your budget.
A $80 fill-up here and a $110 fill-up there adds up fast — especially if your household runs two cars. When petrol prices spike, it’s time to revisit your budget. Cut back in a couple of other categories to cover the extra fuel cost. Maybe that means packing your lunch instead of buying a $20 meal deal, or pausing a streaming service you barely use.
Just don’t cut your emergency fund or super contributions to cover petrol. Those protect your financial future — and no amount of petrol savings is worth compromising that.
Get on Top of Your Budget
You can’t control what happens at the bowser, but you can absolutely control how you respond. A clear budget gives you the flexibility to absorb price spikes without going into the red.
Next Steps
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Download a fuel comparison app like Petrol Spy or FuelCheck to find the cheapest servo near you.
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Learn your local petrol price cycle and time your fill-ups for the bottom of the dip.
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Build a zero-based budget so that petrol price rises don’t throw your whole month off track.
PS – this will be temporary but inconvenient – Kelvin – March 2026
