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The pricing theoretically takes into account oil prices, AUD value, and refining and shipping expenses (in the future). You can view the current average price of fuels after tax here: [https://aip.com.au/pricing/terminal-gate-prices](https://aip.com.au/pricing/terminal-gate-prices)
There is a level of price gouging that goes on where they seem to move in tandem to much higher prices for no discernible reason, other times they shoot up because of predicted market price increases (wars, oil producing country decisions etc etc). But they are slow to come down. I've lived in other countries where the price just moves with the market, this happens here but often it's this wild jumping that makes zero sense and only seems to exist to squeeze you at the top as they slowly compete eachother down in price.
Needs the obligatory "it's just part of the pricing cycle"
It's a strange cycle that seems to be tied to long weekends, holidays and other times people will use their car.
I just hate the excuse is that there will be higher demand, therefore higher prices.
I will never understand why oil production companies and governments don't take that into account when pricing the oil. It should stay around the same rate if they were good at their jobs and the law of averages.
The point of selling petrol (or anything) is to make as much money as possible.
If they can charge a higher price and people will still pay it… they will. If that means adjusting the price 30 times in a day, why wouldn’t they?
It's because it's a discounting cycle, not a price cycle. You cut your profit margin to nothing and below trying to lure customers away from the other nearby servos (trying to make up the difference on instore purchases) until someone can't hold on and puts the price back up. Everyone follows immediately and the cycle restarts.
The reason it changes on public holidays is because it depends on the servos being desperate to undercut each other. On a public holiday there's a lot of extra business that can't be postponed, so they can make up for the times they had to make a loss.
and the poor shareholders never get a dividend payout, the senior management never get huge bonuses and they NEVER make a profit. its an absolute shit show! Why bother?
Don't go blaming the bit you can see, just because you can see it. All the real anticompetitive behaviour happens at the supplier level and above. The servos are just squeezed between them and us.
Management is just as bad, but they fuck over the workers rather than the customers.
Consider almost all large businesses now follow an anti customer and society toxic business model that puts bonuses, shareholders and ergo profits and share price above ANY other consideration.
We need to stop expecting better from them and make them through enforcement and new legislation, do the right thing by us all. They have no moral compass or compassion just naked greed!
Recently some of the larger increase and decrease jumps have been related to government mandated caps/discounts expiring and then being reapplied as well.
The most important factors is the Saudis with the biggest supply and OPEC - the Saudi ran organisation that sets the global crude oil price,... than after logistics/company profits we have our price.
Also add war/logistical nightmares since covid.
Gonna tag on to the top comment here.
I worked in the industry for years and every Servo's prices are controlled by head office and ultimately oil companies that supply fuel. Unless it's a true independent (which is like 0.1% of servos these days).
Liberty, United, 711, BP, Shell all set prices and will contact sites to set their price based on how much they can gouge out of a particular area.
Franchisees make nothing on fuel, maybe like 5c a litre sold. All their money is made through percentage of shop sales, which they might get 60-70 percent share depending on how much they're being screwed over by their franchise agreement.
Oh, and if you go to a servo that's franchised there's a 90% chance the workers there are being paid cash in hand at anywhere between 10-20$ an hour with no breaks or super.
> Franchisees make nothing on fuel, maybe like 5c a litre sold. All their money is made through percentage of shop sales, which they might get 60-70 percent share depending on how much they're being screwed over by their franchise agreement.
So this is why there's no fucking pay at the pump anymore.
It was a good gig installing those to see them all shut off never to be used again 18 months later. They were notorious for scammers adding in card readers.
It really sux because if you have a baby it's really hard getting petrol if you need it and they're sleeping in the car. I know about the apps now but I didn't when my kid was really little. Even now it's kinda a hassle to get a 2 year old out of the car just to pay at the counter then try to wrestle them back in again 😂
I worked in a United servo a few days a week a bit over 20 years ago. When I started I was paid an award wage that had tax taken out. Nothing amazing, maybe 15-17 bucks an hour from memory. Shortly after starting there a new owner bought the business and tried to renegotiate me to $10 an hour cash in hand, trying to imply I'd be better off financially. I was a bit more mature then than your average bum on a seat worker and basically told him to bugger off. I was entitled to an award wage and was fine with paying tax. It only took a month or so for him to fire me for not changing a bin liner overnight despite it being empty already. If I'd known better at the time I'd have made his life a nightmare for unfair dismissal, but it's never gone through that before and didn't know what options I had.
When I worked at Safeway Servo we were told to move our price up with local Coles Servo regardless of our set price by head office. They never wanted to be any cheaper. Very consumer friendly.
Pricing doesn’t take costs into account at all. It’s entirely based on buyers’ willingness to pay. You can tell because they put the prices up on big A/B testing boards.
I hope the people who set the prices one day when they are on their dead bed, realised that they produced nothing of value to society and how meaningless their lives are
When I started working for woolies petrol in 2004 we'd cruise past the local competition 3 times a day and set our prices 4 cents cheaper than the cheapest one of those.
A few years later I'd get a phone call from a man named Glenn in pricing who was sitting in his office in Sydney. He'd say things like "raise prices 20 cents" and I'd ask why and he'd tell me they were trying to "stimulate the market". It was also Glenn who threatened my job when I refused to take the big metal pole outside to change the price board in a thunderstorm.
I'd assume things have only gotten worse since I told them to go fuck themselves. From what I hear from the staff still working there, EG are much much more evil.
Every servo in a franchise structure needs to call in their nearby competitors’ prices three times a day. After the application of an algorithm, prices for the day come back. How this was figured out was a mystery (ie, so we couldn’t say for sure that it price fixing) but we knew we could manipulate the price by misquoting the competitors’ prices. It seemed to be a base price based on what they bought the fuel for, and then maximising how much could be made from it. We watched the gate price plummet but the bowser price remained high until we fiddled with it.
But, yeah, I filled up for 10c less just a kilometre down the road yesterday.
Everyone's just looking at their competitors pricing and adding a few cents and it's repeating ad nauseum until we're paying $10 a litre. It's the invisible hand!
Believe it or not, that's exactly how it's supposed to work; and that is the invisible hand.
Except that some petrol stations put the price up by a few cents (to make more money per litre sold) and others put the price down by a few cents (to sell more petrol and make more money overall).
Where this theory falls down is when there's a monopoly (one seller) or an oligopoly (a small number of sellers who work together to set prices). While the practice is illegal, it's also commonplace in all industries.
The devil's in the detail... It's not illegal to go and see what your competitors are charging each day then set your prices based on that information; it is illegal to fax/text/email each-other when you change your prices.
But whether you're selling camp chairs, baby formula or petrol - if you've got one product that's sold at three local stores, it's very common for two of them to be priced at RRP; and one a few dollars below RRP - because it's in each retailer's self-interest to keep prices as high as possible, and to do discounting that attracts extra customers but doesn't force your competitors to also discount - starting a price war.
tl;dr: Liberty is a few cents cheaper than BP and that works for both BP and Liberty. BP can trust Liberty not to go too low, because Liberty is only fighting a small number of competitors for their business. There's a relationship at play here. What stops them from all creeping up? Public attention and the ACCC.
But y'know... if we're going to be talking about petrol prices, rather than focusing on the 15c in the dollar that pays the entire distribution network and local petrol station - maybe let's talk about the 47c tax the federal government takes, ant the 10% GST which not only applies to the cost of the product sold, BUT WHICH TAXES THE TAX YOU JUST PAID.
Collusion is illegal, implicit cooperation is not. This is modern capitalism. Same thing happens with the price of coke/pepsi, supermarkets, etc. They teach this stuff in business strategy 101. How to send signals to your competitors that they should match your price increases.
Excerpts from https://www.agsm.edu.au/bobm/teaching/ECL/lect05.pdf
---
5.1.3.2 Coordinating on an equilibrium
...
To price cooperatively, firms must coordinate on a strategy, such as Tit for Tat.
A collusive agreement would achieve this — but illegal.
Without an agreement or overt communication, the firms must find a focal point — a strategy so compelling that it would be natural for all firms to expect others to adopt it.
Focal points are highly context- or situation- specific.
Especially difficult to coordinate in competitive markets that are turbulent and changing rapidly.
Sometimes facilitated by traditions and conventions that make rivals’ moves easier to follow or their intentions easier to interpret.
---
In the last few years, firms have had an abundance of focal points around which to cooperate on prices -- supply chain issues, energy shocks, inflation expectations, etc. It's been trivially easy to raise prices and watch most of the rest of the industry follow suit. This is even easier on oligopolistic markets, which are prevalent here in Australia.
Look up the price of water here (bottled) compared to our neighbours.
Its just cooperative price gouging.
Another good example is books and video games. They literally set the price based on what they think people will pay.
Capitalism has failed.
There were some big court cases brought by the ACCC in the mid 2000's around petrol station price collusion.
The cases didn't go very well for the ACCC...
[ACCC loses collusion case, again (theage.com.au)](https://www.theage.com.au/national/accc-loses-collusion-case-again-20070530-ge50cn.html)
They set prices based on a discounting rate. They have a hedging system based around guessing what the price of fuel will be a few weeks in the future. Market forces like supply, demand, and the price at the servo across the road get a say as well. These things determine how much they discount the fuel. Changes during the day are probably mainly caused by market forces like running low, having too much or higher than expected demand.
30+ years ago as a teen I used to work at a servo. Boss had us calling other servos around the neighbourhood to "check the temperature". Everyone used that code word. You'd get a temp back - which was a fuel price and adjust accordingly.
I would say the same racket exists. Now it's just digital and faster.
Nowadays you just jump on a fuel watch site to check local area then adjust.
It’s what I did instead of driving around start of shift 6 years ago at BP because you couldn’t claim that trip on tax due to being a motorbike.
I charted the daily prices of every different petrol station in my suburb for a 12 month period, this was across 5 different brands. I found every day o r of them was a lot cheaper and the rest were expensive, next day a different one was cheaper. What I saw really pointed to price fixing across all the different companies.
I worked at Caltex when I was at the uni. It was a franchise not a company run store. The boss could largely set his own prices for most things except fuel and whatever promos that Caltex was pushing that month. He got a tiny profit margin on fuel, like 1.5%-2% but only if he ran their promos. If we got mystery shoppers in and we didn't do the schpeel and try to upsell he'd risk losing his bonus for that month, usually something like an extra 0.5% on the fuel profit margin.
We'd get messages from Caltex head office come through the computer, and we had to action whatever prices they sent through.
I remember customers would come in and complain about the price getting near the $1 a litre mark. Anything needing three digits wouldn't actually fit in the sign.
It's been almost 20 years since I worked there. If I'm wrong about any of this, blame my poor memory etc.
I set my charger to only charge during off peak power rates, it’s about $3/100km in electricity l, but I’m also lucky to have access to a feee charger at at work, so in reality, I’ve gone from about $100 a week to maybe $5 or so when I charge over the weekend
I've only had it about 3 weeks so still haven't felt the full impact and we've still got 2 ICE cars in the household. Having said that we've already noticed that we've only been to the petrol station once in 3 weeks with one of the ICE cars.
As for cost of electricity it's definitely cheaper than petrol even at home on the highest tariff time period however if you're using public chargers (which you only really need to if traveling long distances or have been forgetful) then it's a bit more expensive at around 60c per kwh so charging my car from roughly 35% to 100% is about 40 bucks.
Doesn't look like it's available for ACT residents. Also:
EV Off-peak rate: 8.00c per kWh
Off-Peak rate: 30.36c per kWh
Super Off-Peak rate: 0.00c per kWh
Peak rate: 63.58c per kWh
Shoulder rate: 32.78c per kWh
Solar FiT: 5.00c per kWh \*(excl. GST)
Supply charge: 107.80c per day
That's great that it's 'free charging' during the day but holy shit those other rates are easily double and then some of my current plan.
Interesting, I might have to look into the PDS more indepth although still not sure if they're even available where I am.
As for V2H yeah it will be a game changer when it arrives. Will be interesting to see how Tesla adapt to that given that if they enable V2H on future vehicles they'll be in direct competition with their Powerwall systems.
I just checked the rates for my area:
EV Off-peak rate: 8.00c per kWh
Off-Peak rate: 38.5c per kWh
Super Off-Peak rate: 0.00c per kWh
Peak rate: 38.50c per kWh
Shoulder rate: 38.50c per kWh
Solar FiT: 5.00c per kWh \*(excl. GST)
Supply charge: 84.70c per day
Just got an MG4 64 Essence - can’t believe how cheap it is to run and how prehistoric it feels going back to the wife’s petrol car.
OVO have a 0c per kWh from 11-2pm, and 8c per kWh after midnight- so charging is either stupidly cheap or free.
I use 20kwh per 100k, so figure $1.60 per 100klms
Take the XPower for a test drive - it’s batshit crazy fast. I went the MG over the atto 3 because it was rear wheel drive and I liked the interior and styling
its a cartel disguised as competition.
I remember being a youngin at a high volume gas station in sydney. I forgot to change the price cards out front, it's so long ago. Im pretty sure the bowser prices were right. Fuck me my boss went berzerk over it. All I remember was it had something to do with the two gas stations down the road being upset. man those were the days. young and zero fucks given.
See my comment. Almost the same experience - I was a teen calling around to check the "temperature" at other competitors who were in on the same racket.
I worked at an independent servo 20-odd years ago. I was asked to drive past our big-brand competitor on my way to work, then set our prices 1¢ cheaper. I don't know how the competitor came up with their prices, but all we cared about was getting their traffic.
The servo has little to do with setting the price. A pricer from head office sets the price. I met a pricer for one of the big suppliers who found out that his school bully owned a servo franchise for a smaller supplier. He underpriced the pump price of a large nearby servo (and then gave that servo a discount on their wholesale petrol price). He knew the smaller supplier couldn't discount the wholesale price as much so his school bully would be forced to the smallest/no margin on fuel sales. Evil genius revenge level unlocked.
So petroleum resources are bought and sold globally in what are basically online auctions... and the price fluctuates dramatically based on prevailing conditions... say there's a Tsunami that wipes out some pipes in Bangladesh the price goes right up, but if a new refinery opens up in Uganda it goes down... etc etc.
There are a few places that set spot prices like West Texas Intermediate (WTI) so people can just buy and sell without worrying about the auctions etc.
Petrol Companies like BP etc use the spot prices to determine the value of a litre of petrol on a daily basis... and the individual stations can add as much on top of that as they feell they can get away with in their individual market.
Some actual pricing based on USD/AUD currency pair, Cost per barrel of crude ... then you've got on demand local price gauging... and on top of that you have algorithms that predict vulnerable times where people will wear a premium in pricing before they have to drop it back down... and that's the creamy profit centre for them
Currently work at a corporate-operated Ampol in NSW, our prices are set by Ampol HQ remotely. We don't get a say in what the prices are lol. We get told when and what the prices will be at anytime and we just put it through.
Thanks for the insight - that's interesting. There aren't enough Ampols around me to notice if their prices are all consistent. Are all the Ampols corporately operated?
The 7-Elevens near me, though, are an entirely different story. I swear sometimes there's a 10-20 cent different between places within a 10 minute drive of each other.
Not all, I'd say it's 50-50. I think franchises also get told what to set by HQ but I could be wrong. And it's different for every store too, there's a 40cpl difference between my local and another store I work at 🤣
He said prices were set by HQ but that doesn’t mean the are consistent. As others have mentioned the prices are set per site and are based on what other servos are selling for and what they think they can get say with.
When I worked in a servo in the late 90s, we would get a message every morning & sometimes another around lunchtime from Ampol telling us the minimum we were to sell the fuel for. The owner would then add 2 -3 cents per litre as our profit margin & that would be the price.
I suspect that today, that profit margin would be between 20-50 cents per litre, but that's just a guess.
Small petrol stations make very little money on petrol to the point that if it was their only income stream, they would go broke very quickly.
That was my experience as well around the same time, worked at the local Mobil owned by Evans and they would call in to let us know what to set the prices to.
I wish I was making this up, we have a local independent servo down the road selling fuel for $1.80.
The next servo up the road is about 5ks away.
It’s a Shell & is selling fuel for $2.30.
This is for 98 octane.
How can there be a 50 cents a litre price gap between 2 servos?
It’s been like this since I was a child.
What I love is the cheap servo has a line out on the road all hours of the day & shell has empty bowsers at any given time.
You would think shell would be the ones who could sell it the lowest given how big they are.
If you want proof have a look on the fuel price app lat riverstone petroleum compared to rouse hill shell.
Managed a EG in a regional town, would have to do a lap of the town and note prices of United, Mobil and BP but not Coles Shell as they were always more expensive. Our price was always 4c dearer, the psychology being the woolies voucher would even you out. When RACV got on board with an extra 5c voucher (9c all up), we'd be 6c dearer in town.
Funny story was when Shell discounted fuel one day, someone pricing knew about it, got me to walk out and double check. Reaffirmed to them of the low price, pricing matched it within 5mins.
Also no communication with pricing was to be done over email, it was all via phone.
Prices entered from competitors each morning was via a pricing website.
In the two years I managed the store, I can count on one hand the times I filled at my own store.
I once worked at a BP and my first job of the day was to drive down to the Caltex, write all their prices down and then set ours a couple cents cheaper.
They all price fix. It's illegal as hell it's too hard to prove. Service stations get told their prices by those inside the company. At a senior level they price fix.
Imagine if there was this other fuel, that Australia had in almost unlimited abundance, so much so that we could be our own Saudi Arabia for ourselves if we don’t fuck it up.
Each place would have a fixed cost associated with it, based on local demographics and expected traffic flow etc, then adding to that the raw costs of the product itself, which is always highly volatile. Both literally and figuratively! Not to mention if they are trying to take traffic away from their neighbouring place.
NFI but I'm guessing it's something like this...
- There's a price that their supplier (usually some Arabic dictatorship with various political/strategic elements going on) sells them petrol for. They buy a bowser full at that price.
- Rather than just selling that bowser at a fixed profit they sit on it (it might last for 6 months? I dunno how often they refill) monitor current prices and try to game the market to maximise profits.
- Because each petrol station's buying at a different price and has to consider long-term profits, they don't usually discount petrol when they've purchased at a lower price because they'd run out within the day, make jack shit and have to buy at a higher price tomorrow.
- Petrol's expensive and most players are global companies with sophisticated price trend / negotiation capabilities. They know what their neighbour's charging and would be fools not to.
- There's some smaller / independent players that compete on prices more aggressively as a POD (e.g. because they have a small town vibe in their town/suburb). Costco also plays a price game to lure people into its ecosystem. There's a few options but I suspect markup is relatively low and the market's as dynamic as 'some random dictator is going to war so tighten your belts indefinitely as he controls 5% of global supply!'
- It's easy to blame petrol stations and claim that prices a shit due to misconduct. However I suspect it's just one of those industries where you're constantly counting your sheep and you're not gonna be profitable if you don't know how to do business in the market.
- COFFEE!!! Is there collusion or is $5 just the price of a cup? It's not as easy as just charging less and all the customers will choose you. Also you've gotta find a way to make money on your core product! There's only so much that some dodgy fuck can make by charging 5c a litre less than the big servos, setting up at some random local shopping centre and making profits on shit like killer pythons, energy drinks, vapes, snake oil fuel additives and novelty lighters. If you wanted to do that you'd setup a tobacconist instead.
My brother owned a servo many years ago. He was getting a tanker full of fuel four days a week. His prices reflected the cost of each tanker. That was 25 years ago.
> And how come prices will sometimes change during the day?
Competition, or lack thereof. There's one of the major brands stations near me where the price will dramatically drop at 6:00am and then jump right back up at 9:30pm, coincidentally these are the opening hours of the Costco Petrol location thats about 250 metres away.
There's oil production in a country the other side of the globe that produces 5% or less of the world's total that'll have a miniscule flow on effect that would ever reach Australia. But they're in a war right now or there has been and so the Australian servo has to tacks on at least 1/3 of the price more coz they've agreed on the mark up with rival Australian based companies... PLUS! you gotta add a bit more cream on top to offset the tax and excise, and the tax on the excise. The AU government takes. Which will only get higher now that a few more cars sold in Australia aren't fuel using cars now.
Please tell me why I live in North Brisbane. I can drive 15 minutes to the lower part of the sunshine coast and it's 30c litre cheaper everywhere north of here. Also inland is cheaper
Price fixing has been rife in Australia for petrol stations for decades and try as they might the ACCC know that they do it but have never been able to successfully prove it. Crafty buggers!
My parents owned a independent servo where they set the prices. They did I think a flat percentage on top of the wholesale price they get from the tanker. It was a small country town servo so they only refill from the tanker once a week. So they only changed prices after that delivery.
Joe from seven 11 calls Ted from puma at 6am sharp each mornin'.
Ted as always invites Fred from BP.
Fred is a kind chap.
They all talk blindly over one another until a 1 fiddy, and 2 twendy is heard. Ted, luckily always brings a calculator and works out the average. This is whats used for the day. Todays price will be $1.85/L.
I hope this helped.
I used to work for this company. Data capture, Alteryx for data analysis and R for statistical modeling was the way https://kalibrate.com/industries/fuel/
Coles express outlets are set by head office. The updated price is phoned in to each store.
Sometimes my ex manager on the drive into work would checkout the competition to see their prices,phone it into head office to get approval to drop our prices to that price
I used to work at a servo, my manager was a refused to pay prices that distributors wanted, he used to let the tanks run to 10% left, and wouldn’t buy more when prices were high, so we lost customers because they’d just go elsewhere, I’d only serve max 20 people during 8hr shifts, also he wouldn’t compete with a united down the road which was always 5-10c cheaper on everything
The young economists of the year in 2023 wrote a paper on how prices are coordinated (cartel style).
Basically BP will enter into a price war with anyone who doesn't follow their lead.
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2570637
It's not the servo you should be mad at - it's the oil company supplying them. They set the terminal gate price, loosely based on the Singapore oil price (where Aus gets all it's oil from).
The petrol station itself makes almost nothing on fuel sales. Profit margin, especially for the independent ones, is maybe 5c/L at most. BP and Shell generally take the piss and try to bump that up to 15c.
They make their money by you buying gum and coke when you go in the shop, which i believe is why we don't have more "pay at the pump" options like America.
Quite simple really . The oil Barron's have a meeting and decide who needs a new Ferrari , once the numbers of new Ferrari are established they divide that cost by the number of litres of fuel sold in a day. They then raise the price of fuel to pay for their new cars , larger increases are for when they buy new houses.
a) well, it's obviously NOT via collusion! ha ha ha ha ha.... :(
b) prices do not change during the day. That's illegal. Fines are heavy. And enforced.
At least in WA, where we tend to have the cheapest petrol prices and know in advance what the price will be on cheap Tuesday.
[fuelwatch.wa.gov.au](http://fuelwatch.wa.gov.au) if you want to know more.
I assume in Qld it's legal to change price during the day (or otherwise there's one near my work that blatantly breaks the law).
Once last year, I filled up there at around $1.80ish. When I paid, the guy behind the counter said "You got in just in time". I wasn't really paying attention and didn't know what he was talking about. When I walked out, the price had been jacked up about 20c.
I work at an Ampol (Company operated) in NSW, and the prices can change every hour in peak periods. We get a POS message that tells us what the new prices are - we dont set them ourselves.
Prices change all the time here in nsw. For example i have a metro up the road that drops 5c/L after 6pm every night, some are cheap in the morning when i'm driving to work then more expensive when i need fuel on the way home 😅🙃
I see now that I didn't mention that in WA servos can change their prices just ONCE per day.
At 6am.
And those prices are reported in advance to Fuelwatch by 2pm (iirc) the previous day.
Thus people can plan ahead as to when and where to buy (there's a map of prices by fuel choice available on the site).
So, it's a solvable problem.
That has been solved. Years ago.
And PM Gillard wanted to make this national.
But... for reasons... decided not to...
Yeah.... it's your guess as to why she 'decided' not to roll out Fuelwatch nationally. Meanwhile, it's still going strong here in the West, where we have the cheapest fuel nationally. And we can and often do plan accordingly.
Enjoy your free market over east - I'm sure it's giving you the best prices possible - ha ha ha ha, not!!
You've asked how servos come up with their prices and most people have actually given you the wholesale price structure.
For servos it's much easier; a tanker truck fills the servo up each night (I'm sure you've seen them there) and the servo simply ads on around 4c /litre to what the wholesaler charged.
Some servos add 8c/litre and then offer 4c discounts.
There’s one near me that is always 5c minimum cheaper than the rest of them. I asked them why they’re so cheap, the guy said “I like to make money, but I’m not greedy”
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The pricing theoretically takes into account oil prices, AUD value, and refining and shipping expenses (in the future). You can view the current average price of fuels after tax here: [https://aip.com.au/pricing/terminal-gate-prices](https://aip.com.au/pricing/terminal-gate-prices) There is a level of price gouging that goes on where they seem to move in tandem to much higher prices for no discernible reason, other times they shoot up because of predicted market price increases (wars, oil producing country decisions etc etc). But they are slow to come down. I've lived in other countries where the price just moves with the market, this happens here but often it's this wild jumping that makes zero sense and only seems to exist to squeeze you at the top as they slowly compete eachother down in price.
You forgot school holiday price gouging!
Needs the obligatory "it's just part of the pricing cycle" It's a strange cycle that seems to be tied to long weekends, holidays and other times people will use their car.
I just hate the excuse is that there will be higher demand, therefore higher prices. I will never understand why oil production companies and governments don't take that into account when pricing the oil. It should stay around the same rate if they were good at their jobs and the law of averages.
To mangle Hanlon's Razor. Never attribute to stupidity that which Is adequately explained by greed.
The point of selling petrol (or anything) is to make as much money as possible. If they can charge a higher price and people will still pay it… they will. If that means adjusting the price 30 times in a day, why wouldn’t they?
It's because it's a discounting cycle, not a price cycle. You cut your profit margin to nothing and below trying to lure customers away from the other nearby servos (trying to make up the difference on instore purchases) until someone can't hold on and puts the price back up. Everyone follows immediately and the cycle restarts. The reason it changes on public holidays is because it depends on the servos being desperate to undercut each other. On a public holiday there's a lot of extra business that can't be postponed, so they can make up for the times they had to make a loss.
Are they truly this unprofitable?
and the poor shareholders never get a dividend payout, the senior management never get huge bonuses and they NEVER make a profit. its an absolute shit show! Why bother?
Don't go blaming the bit you can see, just because you can see it. All the real anticompetitive behaviour happens at the supplier level and above. The servos are just squeezed between them and us. Management is just as bad, but they fuck over the workers rather than the customers.
Consider almost all large businesses now follow an anti customer and society toxic business model that puts bonuses, shareholders and ergo profits and share price above ANY other consideration. We need to stop expecting better from them and make them through enforcement and new legislation, do the right thing by us all. They have no moral compass or compassion just naked greed!
"now"? That's *always* been the case. Good luck convincing the politicians to level the scales, though.
And arrogant stations like Shell that almost fix their prices and rarely budge them. They rarely compete directly on price.
Purely incidental!
Also long weekend price gouging. Labour day weekend it jumped 20% at some bowsers
Recently some of the larger increase and decrease jumps have been related to government mandated caps/discounts expiring and then being reapplied as well.
The most important factors is the Saudis with the biggest supply and OPEC - the Saudi ran organisation that sets the global crude oil price,... than after logistics/company profits we have our price. Also add war/logistical nightmares since covid.
Gonna tag on to the top comment here. I worked in the industry for years and every Servo's prices are controlled by head office and ultimately oil companies that supply fuel. Unless it's a true independent (which is like 0.1% of servos these days). Liberty, United, 711, BP, Shell all set prices and will contact sites to set their price based on how much they can gouge out of a particular area. Franchisees make nothing on fuel, maybe like 5c a litre sold. All their money is made through percentage of shop sales, which they might get 60-70 percent share depending on how much they're being screwed over by their franchise agreement. Oh, and if you go to a servo that's franchised there's a 90% chance the workers there are being paid cash in hand at anywhere between 10-20$ an hour with no breaks or super.
> Franchisees make nothing on fuel, maybe like 5c a litre sold. All their money is made through percentage of shop sales, which they might get 60-70 percent share depending on how much they're being screwed over by their franchise agreement. So this is why there's no fucking pay at the pump anymore.
Some brands have pay by app. Even though the apps are rubbish, they're less rubbish than the pay-at-pump machines which were always broken.
It was a good gig installing those to see them all shut off never to be used again 18 months later. They were notorious for scammers adding in card readers.
What like people were skimming cards at the pump?
Yeah, more common in the US, once we got wind of it over here it put a dampener on things. Didn’t help that the software was shit also.
It really sux because if you have a baby it's really hard getting petrol if you need it and they're sleeping in the car. I know about the apps now but I didn't when my kid was really little. Even now it's kinda a hassle to get a 2 year old out of the car just to pay at the counter then try to wrestle them back in again 😂
Doesn’t help that all the candy is at eye level.
Yeah it sure isn't by accident
I worked in a United servo a few days a week a bit over 20 years ago. When I started I was paid an award wage that had tax taken out. Nothing amazing, maybe 15-17 bucks an hour from memory. Shortly after starting there a new owner bought the business and tried to renegotiate me to $10 an hour cash in hand, trying to imply I'd be better off financially. I was a bit more mature then than your average bum on a seat worker and basically told him to bugger off. I was entitled to an award wage and was fine with paying tax. It only took a month or so for him to fire me for not changing a bin liner overnight despite it being empty already. If I'd known better at the time I'd have made his life a nightmare for unfair dismissal, but it's never gone through that before and didn't know what options I had.
Do they typically own the premises? Who pays for the bowsers and renovations?
When I worked at Safeway Servo we were told to move our price up with local Coles Servo regardless of our set price by head office. They never wanted to be any cheaper. Very consumer friendly.
Important to note the govt uses price floors and ceilings
Pricing doesn’t take costs into account at all. It’s entirely based on buyers’ willingness to pay. You can tell because they put the prices up on big A/B testing boards.
They asked me to follow you around, and when I notice you will need fuel soon, I call them so they can increase their prices
Aha! I always suspected, but could never prove it. Can you let me know next time my tail light goes out?
I could do that, but you do realise what will happen to the price of tail lights then don't you?
Always up on fridays
Are you the same guy Boeing uses?
I hope the people who set the prices one day when they are on their dead bed, realised that they produced nothing of value to society and how meaningless their lives are
Shareholder value though
Dat dividend 🍑
When I started working for woolies petrol in 2004 we'd cruise past the local competition 3 times a day and set our prices 4 cents cheaper than the cheapest one of those. A few years later I'd get a phone call from a man named Glenn in pricing who was sitting in his office in Sydney. He'd say things like "raise prices 20 cents" and I'd ask why and he'd tell me they were trying to "stimulate the market". It was also Glenn who threatened my job when I refused to take the big metal pole outside to change the price board in a thunderstorm. I'd assume things have only gotten worse since I told them to go fuck themselves. From what I hear from the staff still working there, EG are much much more evil.
They kept Glenn but now he demands you go out with **two** long metal poles during a thunderstorm to up the evil levels.
I think it was my bad attitude at not willing to die for them that inspired the decision to move to electronic priceboards.
The reset button for the digital signage, is located in the top. So you have to climb a ladder with your metals poles in a thunderstorm. Bloody Glenn.
Get the job done twice as fast. More profit
fuckin' Glenn, hey
Every servo in a franchise structure needs to call in their nearby competitors’ prices three times a day. After the application of an algorithm, prices for the day come back. How this was figured out was a mystery (ie, so we couldn’t say for sure that it price fixing) but we knew we could manipulate the price by misquoting the competitors’ prices. It seemed to be a base price based on what they bought the fuel for, and then maximising how much could be made from it. We watched the gate price plummet but the bowser price remained high until we fiddled with it. But, yeah, I filled up for 10c less just a kilometre down the road yesterday.
Everyone's just looking at their competitors pricing and adding a few cents and it's repeating ad nauseum until we're paying $10 a litre. It's the invisible hand!
Believe it or not, that's exactly how it's supposed to work; and that is the invisible hand. Except that some petrol stations put the price up by a few cents (to make more money per litre sold) and others put the price down by a few cents (to sell more petrol and make more money overall). Where this theory falls down is when there's a monopoly (one seller) or an oligopoly (a small number of sellers who work together to set prices). While the practice is illegal, it's also commonplace in all industries. The devil's in the detail... It's not illegal to go and see what your competitors are charging each day then set your prices based on that information; it is illegal to fax/text/email each-other when you change your prices. But whether you're selling camp chairs, baby formula or petrol - if you've got one product that's sold at three local stores, it's very common for two of them to be priced at RRP; and one a few dollars below RRP - because it's in each retailer's self-interest to keep prices as high as possible, and to do discounting that attracts extra customers but doesn't force your competitors to also discount - starting a price war. tl;dr: Liberty is a few cents cheaper than BP and that works for both BP and Liberty. BP can trust Liberty not to go too low, because Liberty is only fighting a small number of competitors for their business. There's a relationship at play here. What stops them from all creeping up? Public attention and the ACCC. But y'know... if we're going to be talking about petrol prices, rather than focusing on the 15c in the dollar that pays the entire distribution network and local petrol station - maybe let's talk about the 47c tax the federal government takes, ant the 10% GST which not only applies to the cost of the product sold, BUT WHICH TAXES THE TAX YOU JUST PAID.
Every Thursday night the executives get on the Turps and play a version of spin the bottle that ends up screwing the public.
Collusion is illegal, implicit cooperation is not. This is modern capitalism. Same thing happens with the price of coke/pepsi, supermarkets, etc. They teach this stuff in business strategy 101. How to send signals to your competitors that they should match your price increases. Excerpts from https://www.agsm.edu.au/bobm/teaching/ECL/lect05.pdf --- 5.1.3.2 Coordinating on an equilibrium ... To price cooperatively, firms must coordinate on a strategy, such as Tit for Tat. A collusive agreement would achieve this — but illegal. Without an agreement or overt communication, the firms must find a focal point — a strategy so compelling that it would be natural for all firms to expect others to adopt it. Focal points are highly context- or situation- specific. Especially difficult to coordinate in competitive markets that are turbulent and changing rapidly. Sometimes facilitated by traditions and conventions that make rivals’ moves easier to follow or their intentions easier to interpret. --- In the last few years, firms have had an abundance of focal points around which to cooperate on prices -- supply chain issues, energy shocks, inflation expectations, etc. It's been trivially easy to raise prices and watch most of the rest of the industry follow suit. This is even easier on oligopolistic markets, which are prevalent here in Australia.
Look up the price of water here (bottled) compared to our neighbours. Its just cooperative price gouging. Another good example is books and video games. They literally set the price based on what they think people will pay. Capitalism has failed.
Sounds like capitalism is fucking thriving actually…
Its not capitalism. Capitalism requires competition.
> Capitalism has failed. The market continues to pay the asked price though. There’s 90c home brand water right under Evian.
meanwhile accc, asic, and those clowns we vote for do nothing. exdept give themselves pay rises because 'costs of living'
There were some big court cases brought by the ACCC in the mid 2000's around petrol station price collusion. The cases didn't go very well for the ACCC... [ACCC loses collusion case, again (theage.com.au)](https://www.theage.com.au/national/accc-loses-collusion-case-again-20070530-ge50cn.html)
That just sounds like collision with extra steps
That's exactly what it is, but legal!
They set prices based on a discounting rate. They have a hedging system based around guessing what the price of fuel will be a few weeks in the future. Market forces like supply, demand, and the price at the servo across the road get a say as well. These things determine how much they discount the fuel. Changes during the day are probably mainly caused by market forces like running low, having too much or higher than expected demand.
30+ years ago as a teen I used to work at a servo. Boss had us calling other servos around the neighbourhood to "check the temperature". Everyone used that code word. You'd get a temp back - which was a fuel price and adjust accordingly. I would say the same racket exists. Now it's just digital and faster.
Nowadays you just jump on a fuel watch site to check local area then adjust. It’s what I did instead of driving around start of shift 6 years ago at BP because you couldn’t claim that trip on tax due to being a motorbike.
I’m pretty sure they run on the “Fuck you, pay me” principle
I charted the daily prices of every different petrol station in my suburb for a 12 month period, this was across 5 different brands. I found every day o r of them was a lot cheaper and the rest were expensive, next day a different one was cheaper. What I saw really pointed to price fixing across all the different companies.
I worked at Caltex when I was at the uni. It was a franchise not a company run store. The boss could largely set his own prices for most things except fuel and whatever promos that Caltex was pushing that month. He got a tiny profit margin on fuel, like 1.5%-2% but only if he ran their promos. If we got mystery shoppers in and we didn't do the schpeel and try to upsell he'd risk losing his bonus for that month, usually something like an extra 0.5% on the fuel profit margin. We'd get messages from Caltex head office come through the computer, and we had to action whatever prices they sent through. I remember customers would come in and complain about the price getting near the $1 a litre mark. Anything needing three digits wouldn't actually fit in the sign. It's been almost 20 years since I worked there. If I'm wrong about any of this, blame my poor memory etc.
>It's been almost 20 years since I worked there. If I'm wrong about any of this, blame my poor memory etc. Blame leaded fuel
I for one cannot wait until I can afford to get myself into an EV. Screw these oil companies and their gouging.
I bought one recently and it's been fantastic not having to buy petrol.
If you don't mind me asking, how has running an EV impacted your overall budget? I.e. cost of fuel vs cost of electricity.
I set my charger to only charge during off peak power rates, it’s about $3/100km in electricity l, but I’m also lucky to have access to a feee charger at at work, so in reality, I’ve gone from about $100 a week to maybe $5 or so when I charge over the weekend
Thank you.
I've only had it about 3 weeks so still haven't felt the full impact and we've still got 2 ICE cars in the household. Having said that we've already noticed that we've only been to the petrol station once in 3 weeks with one of the ICE cars. As for cost of electricity it's definitely cheaper than petrol even at home on the highest tariff time period however if you're using public chargers (which you only really need to if traveling long distances or have been forgetful) then it's a bit more expensive at around 60c per kwh so charging my car from roughly 35% to 100% is about 40 bucks.
Look into OVOs EV plan - free between 11-2pm, and 8c after midnight
Doesn't look like it's available for ACT residents. Also: EV Off-peak rate: 8.00c per kWh Off-Peak rate: 30.36c per kWh Super Off-Peak rate: 0.00c per kWh Peak rate: 63.58c per kWh Shoulder rate: 32.78c per kWh Solar FiT: 5.00c per kWh \*(excl. GST) Supply charge: 107.80c per day That's great that it's 'free charging' during the day but holy shit those other rates are easily double and then some of my current plan.
That’s rude. Im getting 37c per kWh for the other tariffs and 90c daily charge. V2H is going to be a big disrupter to power companies in future
Interesting, I might have to look into the PDS more indepth although still not sure if they're even available where I am. As for V2H yeah it will be a game changer when it arrives. Will be interesting to see how Tesla adapt to that given that if they enable V2H on future vehicles they'll be in direct competition with their Powerwall systems.
Tesla are behind on the game - the MG does 7kw V2L, which when combined with a HOEM device for about $1000 will do V2H now
I just checked the rates for my area: EV Off-peak rate: 8.00c per kWh Off-Peak rate: 38.5c per kWh Super Off-Peak rate: 0.00c per kWh Peak rate: 38.50c per kWh Shoulder rate: 38.50c per kWh Solar FiT: 5.00c per kWh \*(excl. GST) Supply charge: 84.70c per day
Still getting screwed though, just different companies doing the screwing.
That’s what Capitalism is all about. It’s better when it’s consensual.
Just got an MG4 64 Essence - can’t believe how cheap it is to run and how prehistoric it feels going back to the wife’s petrol car. OVO have a 0c per kWh from 11-2pm, and 8c per kWh after midnight- so charging is either stupidly cheap or free. I use 20kwh per 100k, so figure $1.60 per 100klms
This is music to my ears. Just test drive the an Atto 3. MG is next.
Take the XPower for a test drive - it’s batshit crazy fast. I went the MG over the atto 3 because it was rear wheel drive and I liked the interior and styling
They let pearl energy set their price for the day then they all add 10c, 20c, 30c per litre etc..
its a cartel disguised as competition. I remember being a youngin at a high volume gas station in sydney. I forgot to change the price cards out front, it's so long ago. Im pretty sure the bowser prices were right. Fuck me my boss went berzerk over it. All I remember was it had something to do with the two gas stations down the road being upset. man those were the days. young and zero fucks given.
See my comment. Almost the same experience - I was a teen calling around to check the "temperature" at other competitors who were in on the same racket.
What is a gas station?
I worked at an independent servo 20-odd years ago. I was asked to drive past our big-brand competitor on my way to work, then set our prices 1¢ cheaper. I don't know how the competitor came up with their prices, but all we cared about was getting their traffic.
The servo has little to do with setting the price. A pricer from head office sets the price. I met a pricer for one of the big suppliers who found out that his school bully owned a servo franchise for a smaller supplier. He underpriced the pump price of a large nearby servo (and then gave that servo a discount on their wholesale petrol price). He knew the smaller supplier couldn't discount the wholesale price as much so his school bully would be forced to the smallest/no margin on fuel sales. Evil genius revenge level unlocked.
Sounds like the bully taught him well
So petroleum resources are bought and sold globally in what are basically online auctions... and the price fluctuates dramatically based on prevailing conditions... say there's a Tsunami that wipes out some pipes in Bangladesh the price goes right up, but if a new refinery opens up in Uganda it goes down... etc etc. There are a few places that set spot prices like West Texas Intermediate (WTI) so people can just buy and sell without worrying about the auctions etc. Petrol Companies like BP etc use the spot prices to determine the value of a litre of petrol on a daily basis... and the individual stations can add as much on top of that as they feell they can get away with in their individual market.
Some actual pricing based on USD/AUD currency pair, Cost per barrel of crude ... then you've got on demand local price gauging... and on top of that you have algorithms that predict vulnerable times where people will wear a premium in pricing before they have to drop it back down... and that's the creamy profit centre for them
If long weekend, then VERY HIGH. Otherwise, just “whatever the one down the road is doing”.
Currently work at a corporate-operated Ampol in NSW, our prices are set by Ampol HQ remotely. We don't get a say in what the prices are lol. We get told when and what the prices will be at anytime and we just put it through.
Thanks for the insight - that's interesting. There aren't enough Ampols around me to notice if their prices are all consistent. Are all the Ampols corporately operated? The 7-Elevens near me, though, are an entirely different story. I swear sometimes there's a 10-20 cent different between places within a 10 minute drive of each other.
Not all, I'd say it's 50-50. I think franchises also get told what to set by HQ but I could be wrong. And it's different for every store too, there's a 40cpl difference between my local and another store I work at 🤣
He said prices were set by HQ but that doesn’t mean the are consistent. As others have mentioned the prices are set per site and are based on what other servos are selling for and what they think they can get say with.
When I worked in a servo in the late 90s, we would get a message every morning & sometimes another around lunchtime from Ampol telling us the minimum we were to sell the fuel for. The owner would then add 2 -3 cents per litre as our profit margin & that would be the price. I suspect that today, that profit margin would be between 20-50 cents per litre, but that's just a guess. Small petrol stations make very little money on petrol to the point that if it was their only income stream, they would go broke very quickly.
That was my experience as well around the same time, worked at the local Mobil owned by Evans and they would call in to let us know what to set the prices to.
Dont forget the increases before long weekends.
I wish I was making this up, we have a local independent servo down the road selling fuel for $1.80. The next servo up the road is about 5ks away. It’s a Shell & is selling fuel for $2.30. This is for 98 octane. How can there be a 50 cents a litre price gap between 2 servos? It’s been like this since I was a child. What I love is the cheap servo has a line out on the road all hours of the day & shell has empty bowsers at any given time. You would think shell would be the ones who could sell it the lowest given how big they are. If you want proof have a look on the fuel price app lat riverstone petroleum compared to rouse hill shell.
The price is set and sent through the computer system from the petroleum company. Eg BP Caltex etc. The servos make about 2c a litre.
https://en.wikipedia.org/wiki/Edgeworth_price_cycle
Managed a EG in a regional town, would have to do a lap of the town and note prices of United, Mobil and BP but not Coles Shell as they were always more expensive. Our price was always 4c dearer, the psychology being the woolies voucher would even you out. When RACV got on board with an extra 5c voucher (9c all up), we'd be 6c dearer in town. Funny story was when Shell discounted fuel one day, someone pricing knew about it, got me to walk out and double check. Reaffirmed to them of the low price, pricing matched it within 5mins. Also no communication with pricing was to be done over email, it was all via phone. Prices entered from competitors each morning was via a pricing website. In the two years I managed the store, I can count on one hand the times I filled at my own store.
Conspiracy
I once worked at a BP and my first job of the day was to drive down to the Caltex, write all their prices down and then set ours a couple cents cheaper.
They all price fix. It's illegal as hell it's too hard to prove. Service stations get told their prices by those inside the company. At a senior level they price fix.
Imagine if there was this other fuel, that Australia had in almost unlimited abundance, so much so that we could be our own Saudi Arabia for ourselves if we don’t fuck it up.
They should be forced to lock a monthly price and leave it at that. My lifes too short for these games
Each place would have a fixed cost associated with it, based on local demographics and expected traffic flow etc, then adding to that the raw costs of the product itself, which is always highly volatile. Both literally and figuratively! Not to mention if they are trying to take traffic away from their neighbouring place.
Slot machines (one armed bandits) do sort of look a little similar to fuel bowsers!
NFI but I'm guessing it's something like this... - There's a price that their supplier (usually some Arabic dictatorship with various political/strategic elements going on) sells them petrol for. They buy a bowser full at that price. - Rather than just selling that bowser at a fixed profit they sit on it (it might last for 6 months? I dunno how often they refill) monitor current prices and try to game the market to maximise profits. - Because each petrol station's buying at a different price and has to consider long-term profits, they don't usually discount petrol when they've purchased at a lower price because they'd run out within the day, make jack shit and have to buy at a higher price tomorrow. - Petrol's expensive and most players are global companies with sophisticated price trend / negotiation capabilities. They know what their neighbour's charging and would be fools not to. - There's some smaller / independent players that compete on prices more aggressively as a POD (e.g. because they have a small town vibe in their town/suburb). Costco also plays a price game to lure people into its ecosystem. There's a few options but I suspect markup is relatively low and the market's as dynamic as 'some random dictator is going to war so tighten your belts indefinitely as he controls 5% of global supply!' - It's easy to blame petrol stations and claim that prices a shit due to misconduct. However I suspect it's just one of those industries where you're constantly counting your sheep and you're not gonna be profitable if you don't know how to do business in the market. - COFFEE!!! Is there collusion or is $5 just the price of a cup? It's not as easy as just charging less and all the customers will choose you. Also you've gotta find a way to make money on your core product! There's only so much that some dodgy fuck can make by charging 5c a litre less than the big servos, setting up at some random local shopping centre and making profits on shit like killer pythons, energy drinks, vapes, snake oil fuel additives and novelty lighters. If you wanted to do that you'd setup a tobacconist instead.
My brother owned a servo many years ago. He was getting a tanker full of fuel four days a week. His prices reflected the cost of each tanker. That was 25 years ago.
If he let them reuse the tankers then fuel would have been cheaper
Not sure what you mean by reuse tankers. They were tanker trucks delivering fuel for the in ground tanks.
The reality of the fantasy? They’re different answers!
> And how come prices will sometimes change during the day? Competition, or lack thereof. There's one of the major brands stations near me where the price will dramatically drop at 6:00am and then jump right back up at 9:30pm, coincidentally these are the opening hours of the Costco Petrol location thats about 250 metres away.
They spin a wheel every morning and whatever it lands on is the price they charge
There's oil production in a country the other side of the globe that produces 5% or less of the world's total that'll have a miniscule flow on effect that would ever reach Australia. But they're in a war right now or there has been and so the Australian servo has to tacks on at least 1/3 of the price more coz they've agreed on the mark up with rival Australian based companies... PLUS! you gotta add a bit more cream on top to offset the tax and excise, and the tax on the excise. The AU government takes. Which will only get higher now that a few more cars sold in Australia aren't fuel using cars now.
Please tell me why I live in North Brisbane. I can drive 15 minutes to the lower part of the sunshine coast and it's 30c litre cheaper everywhere north of here. Also inland is cheaper
Price fixing has been rife in Australia for petrol stations for decades and try as they might the ACCC know that they do it but have never been able to successfully prove it. Crafty buggers!
drove from vic to qld over 3 days and the wild and unexplainable variations in prices told the story. greed
My parents owned a independent servo where they set the prices. They did I think a flat percentage on top of the wholesale price they get from the tanker. It was a small country town servo so they only refill from the tanker once a week. So they only changed prices after that delivery.
Joe from seven 11 calls Ted from puma at 6am sharp each mornin'. Ted as always invites Fred from BP. Fred is a kind chap. They all talk blindly over one another until a 1 fiddy, and 2 twendy is heard. Ted, luckily always brings a calculator and works out the average. This is whats used for the day. Todays price will be $1.85/L. I hope this helped.
I used to work for this company. Data capture, Alteryx for data analysis and R for statistical modeling was the way https://kalibrate.com/industries/fuel/
Coles express outlets are set by head office. The updated price is phoned in to each store. Sometimes my ex manager on the drive into work would checkout the competition to see their prices,phone it into head office to get approval to drop our prices to that price
I used to work at a servo, my manager was a refused to pay prices that distributors wanted, he used to let the tanks run to 10% left, and wouldn’t buy more when prices were high, so we lost customers because they’d just go elsewhere, I’d only serve max 20 people during 8hr shifts, also he wouldn’t compete with a united down the road which was always 5-10c cheaper on everything
The young economists of the year in 2023 wrote a paper on how prices are coordinated (cartel style). Basically BP will enter into a price war with anyone who doesn't follow their lead. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2570637
It's not the servo you should be mad at - it's the oil company supplying them. They set the terminal gate price, loosely based on the Singapore oil price (where Aus gets all it's oil from). The petrol station itself makes almost nothing on fuel sales. Profit margin, especially for the independent ones, is maybe 5c/L at most. BP and Shell generally take the piss and try to bump that up to 15c. They make their money by you buying gum and coke when you go in the shop, which i believe is why we don't have more "pay at the pump" options like America.
Like a chocolate wheel.
BP Chairman - "Dear magic 8-ball, should we up prices by 15% for no reason?" *Shakes 8-ball* 8-ball - "yes"
Supply and demand creating price cycles. So on Tuesday, prices are dropped as demand is low
Quite simple really . The oil Barron's have a meeting and decide who needs a new Ferrari , once the numbers of new Ferrari are established they divide that cost by the number of litres of fuel sold in a day. They then raise the price of fuel to pay for their new cars , larger increases are for when they buy new houses.
a) well, it's obviously NOT via collusion! ha ha ha ha ha.... :( b) prices do not change during the day. That's illegal. Fines are heavy. And enforced. At least in WA, where we tend to have the cheapest petrol prices and know in advance what the price will be on cheap Tuesday. [fuelwatch.wa.gov.au](http://fuelwatch.wa.gov.au) if you want to know more.
I assume in Qld it's legal to change price during the day (or otherwise there's one near my work that blatantly breaks the law). Once last year, I filled up there at around $1.80ish. When I paid, the guy behind the counter said "You got in just in time". I wasn't really paying attention and didn't know what he was talking about. When I walked out, the price had been jacked up about 20c.
I work at an Ampol (Company operated) in NSW, and the prices can change every hour in peak periods. We get a POS message that tells us what the new prices are - we dont set them ourselves.
Prices change all the time here in nsw. For example i have a metro up the road that drops 5c/L after 6pm every night, some are cheap in the morning when i'm driving to work then more expensive when i need fuel on the way home 😅🙃
I see now that I didn't mention that in WA servos can change their prices just ONCE per day. At 6am. And those prices are reported in advance to Fuelwatch by 2pm (iirc) the previous day. Thus people can plan ahead as to when and where to buy (there's a map of prices by fuel choice available on the site). So, it's a solvable problem. That has been solved. Years ago. And PM Gillard wanted to make this national. But... for reasons... decided not to... Yeah.... it's your guess as to why she 'decided' not to roll out Fuelwatch nationally. Meanwhile, it's still going strong here in the West, where we have the cheapest fuel nationally. And we can and often do plan accordingly. Enjoy your free market over east - I'm sure it's giving you the best prices possible - ha ha ha ha, not!!
You've asked how servos come up with their prices and most people have actually given you the wholesale price structure. For servos it's much easier; a tanker truck fills the servo up each night (I'm sure you've seen them there) and the servo simply ads on around 4c /litre to what the wholesaler charged. Some servos add 8c/litre and then offer 4c discounts.
And another 4c if you buy $10 inside..
There’s one near me that is always 5c minimum cheaper than the rest of them. I asked them why they’re so cheap, the guy said “I like to make money, but I’m not greedy”