Decoding Fuel Prices: Why $100 Oil Doesn’t Indicate $2.00/L at the Pump

Every time the price of crude oil approaches US$100 a barrel, Australians inevitably ask why pump prices remain so high, often exceeding $2.00 per litre, given that a barrel contains only 158.987 litres. As of March 15, 2026, Brent crude settled at US$100.21 a barrel. At US$100, the raw crude cost is approximately 62.9 US cents per litre. Converting this to Australian dollars using an exchange rate of $0.70, the cost becomes A$0.898 per litre before refining, freight, storage, wholesaling, retailing, or taxes.

The Complex Journey from Barrel to Bowser

Although the simple barrel-to-bowser calculation provides a starting point, it quickly breaks down in the real world. Australia largely relies on imported refined fuel, making it a price taker in the global market. According to the Australian Institute of Petroleum (AIP), local petrol pricing is primarily driven by Singapore Mogas 95, while diesel prices are influenced by Singapore Gasoil with 10ppm of sulfur, with a typical one- to two-week lag before these regional benchmarks impact Australian wholesale prices.

Australia’s limited refining capacity – with only two operating refineries (Ampol’s Lytton in Queensland and Viva Energy’s Geelong in Victoria) – further exacerbates this reliance on imported refined products.

Beyond the Raw Crude: What Makes Up the Price?

Crude oil isn’t directly converted into petrol. A barrel is refined into a range of products, including petrol, diesel, jet fuel, LPG, petrochemical feedstocks, and asphalt. In fact, the total volume of refined products can exceed the original barrel volume due to processing gains. US refinery data shows that, on average, a barrel yields approximately 45.9% finished motor gasoline, 30.0% distillate fuel oil, and 11.0% kerosene-type jet fuel, with total product output equivalent to 105.9% of the original barrel. This translates to roughly 73.0 litres of petrol, 47.7 litres of distillate, and 17.5 litres of jet fuel from a 158.987-litre barrel.

Australian refineries follow a similar pattern. Ampol’s Lytton refinery produced 43% petrol, 48% middle distillates, and 9% other products in 2025.

Current Australian Price Breakdown (March 15, 2026)

Understanding the current price stack is crucial. According to AIP data, the national average price was 219.5 cents per litre (cpl) for petrol and 245.6 cpl for diesel. Wholesale averages were 194.4 cpl for petrol and 227.8 cpl for diesel. Brent crude equivalent was 87.9 Australian cents per litre, Singapore Mogas 95 was 123.6 cpl, and Singapore Gasoil 10ppm was 160.6 cpl.

Here’s a breakdown of the price increases:

• Petrol: From Brent (87.9 cpl) to Singapore Mogas 95 (123.6 cpl) – a 35.7 cpl increase. From Mogas 95 to Australian wholesale petrol (194.4 cpl) – a 70.8 cpl increase. From wholesale to retail (219.5 cpl) – a 25.1 cpl increase.
• Diesel: From Brent (87.9 cpl) to Singapore Gasoil (160.6 cpl) – a 72.7 cpl increase. From Gasoil to Australian wholesale diesel (227.8 cpl) – a 67.2 cpl increase. From wholesale to retail (245.6 cpl) – a 17.8 cpl increase.

Diesel was 26.1 cpl more expensive than petrol in the latest national averages.

The Role of Taxes and Government Charges

Taxes constitute a significant portion of fuel prices. As of February 3, 2026, excise duty is 52.6 cents per litre for both petrol and diesel, with GST at 10%. At an average petrol price of 219.5 cpl, GST is 19.95 cpl, and excise is 52.6 cpl, totaling 72.55 cpl in government taxes – approximately 33.1% of the average petrol price. For diesel, at 245.6 cpl, GST is 22.33 cpl, excise is 52.6 cpl, totaling 74.93 cpl, or about 30.5% of the pump price.

Understanding Retail Margins

The Australian Competition and Consumer Commission (ACCC) provides the most transparent breakdown of retail petrol pricing. In the December quarter of 2025, the average petrol price in the five largest cities was 180.4 cpl, comprised of: 76.1 cpl for Mogas 95, 20.0 cpl for other wholesale costs and margins, 66.4 cpl for excise and wholesale GST, and 17.9 cpl for the gross indicative retail difference.

The gross indicative retail difference includes retail operating costs and profits, and varies significantly between sites. The annual average gross indicative retail difference in 2025 was 16.3 cpl, slightly above the 10-year inflation-adjusted average.

Refining and Company Disclosures

Publicly available data from companies like Ampol and Viva Energy offer insights into refining margins. Ampol’s Lytton refinery had a margin of US$10.34 per barrel in 2025, while Viva Energy’s Geelong refinery had a margin of US$9.61 per barrel. However, these figures don’t translate directly to pump prices, as they don’t account for all operating costs.

Diesel Price Dynamics

Diesel pricing differs from petrol due to its market structure. Approximately 75% of diesel is sold through contracts or fuel cards, and most is sold in bulk, leading to less retail discounting and a sustained price premium over petrol. The latest national averages show diesel at 245.6 cpl, a 26.1 cpl premium over petrol.

while a US$100 barrel of oil is a significant factor, the price Australians pay at the pump is a complex equation influenced by refining costs, import prices, taxes, and retail margins.