Retail petrol prices

IBISWorld forecasts the average retail price of petrol to dip by 1.0% in 2025-26, to 179.2 cents per litre. The world price of crude oil has started to correct downwards following a spike in 2021-22, driven by the onset of the Russia-Ukraine conflict. OPECs decision to expand supply and weaker global economic growth have also contributed to steady declines in the world crude oil price in recent years, which has led to falling retail petrol prices over the two years through 2025-26.

Petrol prices are closely correlated with the global price of crude oil and are directly influenced by fluctuations in this price. Global oil prices are highly volatile, with a diverse range of factors affecting price movements, including exchange rates, foreign policy decisions, production levels and demand from downstream markets. Overall fuel consumption and the number of motor vehicles on the road also play an influential role in dictating the retail petrol price in Australia.

Retail petrol prices have grown at an annualised 6.7% over the five years through the end of 2025-26, more than double the 3.3% average over the 15 years through 2019. This growth was partially because the 2020 calendar year brought a 17 year low as the pandemic created oversupply conditions in global oil markets, leading to a decline in retail petrol prices over the two years through 2020-21, pushing down retail petrol prices to a 5-year low. This change created ideal conditions for strong growth over the following five years as retail petrol prices bounced back from a low base. Much of the growth has been due to that recovery, while a spike in prices in 2021-22, driven by the onset of the Russia-Ukraine conflict, caused an immediate spike in retail petrol prices. This hike has been slow to recede despite declines in world crude oil prices coinciding with strengthened global production and slowing growth in demand.