Record-long fuel cycle adds to evidence of market failure
Brisbane drivers have suffered a record-long petrol price cycle, more than double the average length, adding further fuel to calls for government intervention.
Over an astounding 95-day period, Gross Retail Margins (GRM) were high on 39 days, exceeding 25 cents per litre (cpl), while only three days were considered cheap with margins falling below 7.5cpl.
RACQ Economist and Affordability Specialist Dr Ian Jeffreys said a number of international and local factors heavily impacted the fuel price.
“A typical fuel price cycle would usually last about six weeks - we have never seen a cycle last three months,” Dr Jeffreys said.
“US President Donald Trump’s tariffs and OPEC’s decision to increase oil production significantly reduced global oil prices, while Tropical Cyclone Alfred hit the pause button on South East Queensland fuel prices for a week in March.
“These factors all impacted in the middle of the discounting phase of the cycle, meaning prices took far longer to reach the cheaper phase than usual.
“Even with the impact of global economic factors and a cyclone, we’re incredibly concerned about how long South East Queensland fuel price cycles are dragging on for and the knock-on effects on drivers’ hip pockets.
“The longer the cycle, the less opportunities there are for motorists to fill up at a cheaper price throughout the year. It means drivers have to wait for an impossibly long time to get cheap fuel.”
In stark contrast, during the same 95-day period, Perth had one expensive day (when the GRM exceeded 25cpl) and 38 cheap days (GRM of less than 7.5cpl), and at least one cheap day was observed every week.
The average retail margins in Perth were half of Brisbane’s (22.2cpl) at 11.1cpl.
RACQ research found Greater Brisbane’s fuel price cycle has been stretched out to an average of 42 days in 2024 – six times longer than what it was in 2010.Back then, motorists had an opportunity to fill up at a cheap price every week, whereas now there are only around nine opportunities a year to get cheaper fuel, and even less if we keep seeing 95-day cycles.
Retail margins have also doubled in this time and the price hikes are more than triple.
“The increasing length of the fuel price cycle provides further evidence of a failing market and the need for regulation,” Dr Jeffreys explained.
“Introducing market regulation would shorten and flatten the price cycle, giving drivers more opportunities to fill up at a cheaper price.
“One possible form of market regulation proposed by RACQ could be introducing a 5cpl daily price cap, to stop fuel companies from hiking their prices by exorbitant amounts overnight.
“Earlier this year, the Queensland Government confirmed they were considering RACQ’s proposals and we’re currently undertaking further analysis to help the Government in its deliberations.”
As Brisbane, Ipswich and Gold Coast fuel prices hit the expensive phase of the cycle, Dr Jeffreys reminded drivers of the importance of shopping around.
“Cheaper fuel is becoming harder to find as we enter the expensive phase of the cycle. It’s important to use price comparison apps like RACQ’s Fuel and Deals app to support the cheapest service stations in your area and not servos with high retail margins.”
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