Do Motorists Care About Petrol Prices in 2019?

Photo courtesy of Freepik Images by @freepik

The majority of cars sold in the Australian market are powerful fuel guzzlers. This is an indication that petrol prices are not a major factor when buying vehicles.

However, a study done in 2017 suggests that the price of petrol is still one of the major reasons why car owners visit a particular service station but it is not the only one.

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A 2017 Australian convenience and petroleum survey reported less than 48 per cent of the respondents said that the main reason for visiting a service station was to buy fuel.

This was a reduction since 2015, when 60% of the people said they visited the service station for fuel.

Apparently, one of the main reasons why people visit a service station is to get all the services at a one-stop shop. This can include servicing of the car, refilling the oil, engine checkup, top up tire air, changing tires, and a few conveniences from the store inside like milk, bread, etc.

1. Convenience

According to Australian convenience and petroleum research, 40% of motorists visit the service station to buy something else other than the fuel. For example, people between the age of 30 to 40 will visit a service station to buy food.

This is unlike people in their 60s who are not in the habit of buying food from service stations but would rather prepare their food.

Apparently, people between 30 years and 40 years of age are also not loyal customers to service stations.

For example, in 2015 only 29% of the people bought fuel from one brand of petrol station. In 2018 this number has further reduced to 19%.

2. Prices Comparison

Very few people research the price of fuel before they enter a service station. They will likely then not look at the street signage and prices at the petrol station.

According to research;

    • Only 11% of Australia motorists used fuel price websites to decide if they want to buy fuel at a particular service station.
    • People over the age of 70 are more likely to use the website to compare prices unlike the younger generation.
    • Motorists in WA are 33% more likely to compare fuel prices compared to other states.
    • Only 8% of motorists use fuel apps to compare prices and these are usually under 30 years.
    • Very few motorists drive out of the way to find cheaper fuel. They stay loyal to one or two stations that are close.
Photo courtesy of Wikimedia Commons Images by Bidgee

Petrol Prices Have Been Falling

Despite what many financial analyst would have you believe, petrol prices have been falling. Commsec says that household spending on fuel has been the lowest in 2018 than it has ever been for the last 30 years.

Another report by the Australian Competition and Consumer Commission (ACCC) concludes that fuel prices in 2016 and 2017 were the lowest in the last 15 years.

This is the reason fuel prices have not been the biggest worry for Australian consumers.

Petrol prices fluctuate now and then. This is because Australia imports about 40% of its petrol and diesel and the factors of demand and supply in a free market economy keep changing.

Petrol Price Breakdown

The average motorist in Australia will pay $1.32 per litre of petrol (as at Nov 2018). The following is the breakdown of how that petrol is priced.

PercentageAmountWhere it Goes
57%75 centsRefining and shipping
33%44 centsTaxes
9%12 centsWholesaler and retailer
1.5%2 centsWholesaler
7.4%10 centsRetailer

The petrol stations have slim margins considering that out of the ten cents they get per litre they’ll need to pay for wages, insurance, utilities, and processing charges.

This might explain the reason petrol stations are selling everything including food, oil and servicing to increase their profit margins.

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