If you’ve been following the news, you might have noticed headlines trumpeting a dramatic plunge in global oil prices.
Brent crude—the international benchmark—has tumbled to its lowest point since early 2021, even dipping below the US$60 per barrel mark.
For many Australians, this sparks a familiar question: if oil is so cheap, why does filling up the car still feel like a punch to the wallet?
Let’s break down what’s really happening, what it means for your next trip to the servo, and when (or if) you can expect some relief at the bowser.
The recent drop in oil prices is the result of a storm of global events. After Russia’s invasion of Ukraine in 2022, oil prices soared above US$100 a barrel, sending shockwaves through global markets and, of course, our local petrol stations. But since then, things have changed.
The oil-producing cartel OPEC+ recently decided to ramp up production more than expected, partly as a way to discipline members like Iraq and Kazakhstan for exceeding their quotas. More oil in the market means more supply, which usually pushes prices down.
At the same time, demand for oil is looking shaky. The US economy shrank for the first time in three years, and China’s factories are slowing down. Add in a simmering trade war between the world’s two largest economies, and you’ve got a recipe for lower global demand.
You’d be forgiven for expecting instant savings at the bowser, but the reality is a bit more complicated. While Australia’s wholesale petrol prices (what retailers pay) have dropped to around 156c per litre for regular unleaded, the price you see at the bowser doesn’t always follow suit straight away.
Petrol prices in Australia are influenced by several key factors. In major cities such as Sydney, Melbourne, Brisbane, Adelaide, and Perth, prices tend to follow predictable cycles, rising and falling over a set period—sometimes weekly, like in Perth, or monthly, as seen in Sydney. These cycles often operate independently of changes in wholesale prices.
Additionally, there is typically a lag between drops in wholesale prices and any noticeable change at the bowser, as retailers usually wait to sell their existing, more expensive stock before adjusting prices.
In regional areas, price movements are generally more stable but also slower to respond. As a result, some regional locations may not see prices fall below 170 cents per litre unless global oil prices continue to decline.
According to NRMA spokesperson Peter Khoury, we should see average prices in the major cities fall into the low 160s—possibly even the high 150s if the trend continues. That’s a significant drop from the 180c per litre average at the end of 2024.
Perth is already experiencing lower petrol prices, with current lows reaching 156 cents per litre and peak prices easing from 195c to 190c.
In Adelaide, prices are expected to fall toward 160c per litre in May, following its typical two-week price cycle.
Sydney is due for a price drop soon, with costs anticipated to decrease by about a cent per day.
Meanwhile, Melbourne and Brisbane may have already reached the lowest point in their respective cycles, meaning any further reductions will likely depend on whether wholesale prices remain low.
But, as always, there’s a catch. Global oil markets are notoriously volatile. A sudden geopolitical event, a change in OPEC+ policy, or a rebound in global demand could send prices back up just as quickly as they fell.
As global oil prices continue to shift, the impact on local petrol costs will depend on a range of factors—from supply dynamics to city-specific pricing cycles. While some areas are already experiencing relief at the bowser, how long these changes will last—or how far they’ll go—remains to be seen.
Have you noticed petrol prices dropping in your area? Or are you still feeling the pinch at the bowser? Share your experiences and tips in the comments below.
Also read: Crude oil drops to four-year low, promising lower petrol prices and inflation
