Consumer Watch with Candice Evans: Unlocking the ins and outs of how diesel prices are set

Unleaded petrol (ULP) prices often grab the headlines but for many West Aussie drivers, diesel is the lifeblood that keeps their utes, trucks, 4WDs and family cars running. Currently, Tuesday is the cheapest day to fill the tank with petrol, but Consumer Protection’s FuelWatch team often receives questions asking when the cheapest day is for diesel. Diesel does not follow a price cycle in the same way ULP does. The ULP price cycle is a deliberate pricing strategy by the fuel companies, so it’s likely not profitable for them to initiate a similar price cycle for diesel given ULP is the primary fuel in the retail market. So how are diesel prices set? Australia’s wholesale diesel prices are driven by benchmark prices set in Singapore, which is the fuel storage and trading hub in the Asia-Pacific region. The diesel benchmark is generally higher than it is for ULP because of bigger demand in the region. Diesel is used extensively in electricity generation, mining, agriculture and other primary industries. Given the higher wholesale price, and that the wholesale price makes up most of the retail cost of diesel, it’s expected to see on average diesel prices sitting above ULP. There are two types of diesel sold in WA — regular diesel and proprietary branded diesel. FuelWatch defines the proprietary branded diesel as simply “brand diesel”, whereas fuel companies market this as “premium” diesel because it has a fuel system cleaning additive. Consider whether this is something your car needs before paying a higher price. FuelWatch often receives complaints about high fuel prices in WA. The good news is data shows that year-to-date Perth has had the cheapest diesel on average in the nation. Last year Perth was equal cheapest with Adelaide and in 2022 Perth was the outright cheapest capital city. On any given day the price of diesel in the Perth metro area can vary by up to 40 cents per litre; this is why it pays to shop around. Buying diesel from the cheapest site rather than the most expensive, at a difference of 40 cpl, means you could potentially save $34 on an 85-litre tank (the average size of a 4WD tank). Over a year, with regular weekly fill ups, you could save $1768. It takes less than 30 seconds to check the FuelWatch website at fuelwatch.wa.gov.au to find the cheapest diesel near you. As some retail sites sell both diesels while others sell only one type, Consumer Protection recommends using the purple toggle button on the FuelWatch website to quickly compare regular diesel and brand diesel prices to ensure you’re always finding the cheapest option near you. It’s also worth considering signing up for personalised alerts. If you’re on a road trip, try using the interactive map, which enables you to expand, contract and scroll along the map to see where your cheap fuel stops could be. Candice Evans is senior regional officer for Consumer Protection in the Mid West