Australian petrol prices reached an all-time high in 2022, linked to global oil supply chain disruptions. But, soaring prices at the pumps are nothing new. A headline from May 2021 read “Petrol prices surging for millions of Aussies”. History shows Australian petrol prices are highly volatile and have caused issues for motorists for decades.
Fuel prices can fluctuate due to a range of factors. These factors can range from international events and pricing decisions by the Organization of the Petroleum Exporting Countries (OPEC) – the cartel that controls oil supply – to the value of the Australian dollar and international fossil fuel embargoes. The Australian Competition and Consumer Commission (ACCC) says that levels of competition between different areas and pricing decisions by wholesalers and retailers also have an impact.
This article looks at the history of fuel prices in Australia and whether Australians would be better off seeking alternatives.
What were fuel prices in Australia in the 1980s?
Before the 1960s, petrol prices across Australia were dropping in addition to the price of shipping it. As ships got bigger and could carry more goods, it became cheaper to ship oil to Australia. But, in the early 1970s, the world experienced its first rise in oil prices. In 1979, oil prices shot up even higher and increased by almost 50 per cent in Australia.
Throughout the 1980s, the Iran-Iraq war further destabilised the oil industry. Due to this turmoil in the Middle East, exports of oil from the region declined further, which led to fuel prices rising in Australia and across the world. In the late 1980s, prices began to fall as Saudi Arabia increased its oil production.
Why have petrol prices risen at such an exponential rate?
Australian petrol prices have whipsawed up and down in line with the rest of the world. As mentioned, they rose in the 1980s due to conflict in the Middle East and again in the 1990s and mid-2000s due to the same issue. Moreover, as cartels like OPEC have tried to raise oil prices and protect their profits, consumers worldwide have paid the price. The energy shock of 2022 has also meant rocketing fuel prices across the world.
Global oil prices influence the average petrol price in Australia, says the RACV. An increase in oil prices affects the wholesale price in Australia and, therefore, the cost of refined petrol. But, petrol prices in Australia are generally lower than in most developed countries. In 2019, Australia was the fourth cheapest country for petrol of the 33 countries featured in the OECD’s list of developed countries. By 2022, the country had dropped to the sixth cheapest on the list.
Australian petrol prices history: Why should we turn away from fuel aside from its rising prices?
The volatile nature of petrol prices makes the transition away from petrol-powered cars even more important. The best advice that the government and industry bodies can give consumers is to buy when prices are low. But, that does not help poorer Australians who are not able to stock up when prices are lower or those who do not have the time to shop around.
Petrol is not only expensive. It is also bad for our health and the environment. Car pollution is a huge contributor to particulate matter (PM) in the atmosphere, which causes a range of health problems. Moreover, transport contributes around one-quarter of all carbon dioxide in the air, causing climate change. Across Australia, climate change is leading to more droughts, flooding, heatwaves and bleaching of the Great Barrier Reef.
A growing number of Australians are now opting for electric vehicles (EVs). Sales of EVs in Australia are rising fast, and a majority of people are now considering buying one. The advantages of EVs are obvious. An EV is far better value for money over the lifetime of an average car. You can also just charge your electric car at home rather than going to a petrol station.
An increasing number of car companies have now committed to phasing out fossil fuel-powered cars and trucks. The UK is leading the world in committing to phasing out all petrol and diesel-powered cars by 2030. The Australian government should do the same.