The Fuel Price Cycle Explained

Use the Price Cycle to Save Money

The price cycle describes a sudden peak and then slow decreasing of fuel prices. The cycle occurs only in capital cities in Australia and other countries in the world.  The price cycle is a marketing strategy developed by petrol companies and has nothing to do with the cost of the product.  Currently Perth has a fortnightly ULP price cycle, other fuels are not affected by price cycles.  

FuelWatch gives Perth motorists a warning email of when a price cycle is about to commence– subscribe to be a day ahead of any price hikes and save up to 20 cents per litre. 

Unleaded Petrol

The length of the price cycle can vary, FuelWatch publishes a graph showing the trend over the last month..

Since the end of 2005 the ULP price cycle in Perth has generally lasted 14 days but during 2004 the ULP price cycle frequently lasted eight days, but had been as short as four days and as long as 29 days. 

Typically a price cycle begins on the day one or more oil companies (the price leader/s) increase its price of unleaded fuel.  The price leader/s will usually increase their prices by between 8 and 14 cpl, however increases of 18 cpl have occurred in the past.   However many retailers keep their prices low, or even continuing to decrease them through the first couple of days of a new price cycle 

On the following day (day two of the price cycle) most of the other petrol companies will tend to follow the price leader and increase their prices.  On days three to five of the cycle we typically see the remaining petrol stations who have not increased their prices - usually the smaller independent brands - follow suit.  Day five or six is usually the worst time to buy petrol because generally most stations have hiked.

Knowing where in the price cycle fuel prices are can help you save hundreds of dollars a year. Understanding the price cycle will assist you to time your purchases and benefit from the cheapest buys.

FuelWatch tips to beat the ULP Price Cycle:

• Subscribe to the free personalised email service which include Price Hike Alerts.
• Use FuelWatch - via the website or call 1300 55 08 08 to find the cheapest retailers.
• Buy when petrol is cheap - not when your tank is empty.
• Best buys follow the price hike - The first day of a new price cycle some retailers may have hiked their prices, but many retailers will usually still be pushing their prices down.  
• Look Out for Small Price Reductions - After a new price cycle has started, fuel prices can decrease overnight by one cent or more. Toward the bottom of the price cycle these decreases can be as small as 0.1 cents per litre.  When price decreases get this small, it usually means a price hike is imminent. 
• Independent fuel outlets are often cheapest immediately after a price hike - Independents usually take two to three days to increase their prices after a price hike.
• Check FuelWatch today for tomorrow's prices - Retailers must notify FuelWatch of their next day's retail price by 2pm. These prices are available after 2:30pm on the FuelWatch services, including this website. Retailers must then change their prices from 6am and the prices must remain unchanged for 24-hours.  The advance notice of fuel prices gives FuelWatch ample opportunity to inform motorists of the best fuel buys and signal a price hike alert.

Premium Unleaded (PULP) and Research Octane Number 98 (98RON) Petrol

PULP and 98 RON also follow the ULP price cycle however at a slightly higher price of up to 10 cents a litre in the metropolitan area. 

Diesel

Diesel unlike most other fuels does not suffer from the same price fluctuations and therefore diesel prices are steadier.  Diesel price changes usually reflect any movements in international prices.

Liquefied Petroleum Gas

Most LPG retailers only change prices in response to a change in the international benchmark price.  Some LPG retailers have recently attempted to introduce a weekly price cycle, which is just a marketing strategy to increase market share.