Automotive fuel is a large and frequent expenditure item for households. This is reflected in the CPI with automotive fuel having a weight of 3.5 per cent of the CPI basket. Volatility in global oil markets, geopolitical shocks and domestic policy decisions have contributed to fuel price fluctuations over the past five decades. Conflict in the Middle East saw automotive fuel prices spike in the month of March 2026, an increase of 32.8 per cent from the previous month. Prices in March were 10.7 per cent higher than the previous peak in September 2023.
This article explains how automotive fuel prices are measured in the CPI and summarises some important events which have impacted fuel prices in Australia.
Australian fuel prices
Australia is dependent on imports to meet domestic demand for transport fuels. Australian fuel prices are strongly linked to Singapore refined petrol and diesel prices. Significant changes in the price of fuel are largely a result of changes in world oil prices and the level of global oil production and demand. Domestic factors such as changes to fuel excise, retail margins and the level of retail competition also impact fuel prices in Australia. Other factors include exchange rates, shipping and insurance costs, port charges, terminal storage, and refiner and wholesale margins.
Measuring Automotive fuel prices in the CPI
Automotive fuel has been included in the CPI since the series was first produced in 1948. Automotive fuel was initially part of the Fuel and light sub-group within the Household supplies and equipment group in the CPI. In 1976, an Automotive fuel series was introduced into the CPI within the Transportation group. Over the years, the contribution of Automotive fuel has been between 2 to 5 per cent of the CPI basket.
Price collection
Prior to 2002, ABS field staff travelled to collect fuel prices from fuel retailers. Prices were obtained from Monday to Friday from approximately 500 outlets across all capital cities. From 2002 onwards, automotive fuel prices have been obtained from administrative pump price data in each capital city. Prices from all major outlets, and some independent outlets, across a wide range of locations within each capital city are collected each day, including weekends and public holidays. Over 100,000 prices are collected each month covering a range of fuel types including unleaded petrol, diesel and LPG.
Important events impacting the price of Automotive fuel
Over the past five decades, major global events have had a significant impact on both the demand and supply of oil, which has flowed through to automotive fuel prices in Australia. Analysis in this section uses quarterly CPI data rather than the newer monthly data so historical comparisons can be made over a longer period of time.
1972 - 1979
The early 1970s saw the first global oil price shock, resulting in fuel prices in Australia increasing by 25 per cent in 1975. Following a brief period of disinflation in the latter half of the 1970s, a second global oil price shock in 1979 saw fuel prices rise almost 50 per cent, which remains the largest annual increase in fuel prices recorded in Australia.
1980 - 1988
The Iran-Iraq war, which lasted from 1980 to 1988, saw oil exports from the Middle East decrease, causing fuel prices to rise further in the first half of the 1980s. Price falls in the mid and late 1980s were a result of an increase in the supply of oil following an expansion of oil production by Saudi Arabia.
1990 - 2000
The Iraq invasion of Kuwait caused oil production to decrease, leading to an increase in fuel prices in 1990. This was a temporary impact as oil production, and subsequently fuel prices, were relatively stable throughout the 1990s.
Following the economic recovery from the 1997 Asian Financial Crisis, Asian demand for oil increased, which resulted in a rise in global oil prices. This coincided with the introduction of the Goods and Services Tax (GST) in Australia in 2000. The GST had only a small impact on fuel prices due to a simultaneous reduction in the fuel excise levy.
2001 - 2008
From 2001 to 2007, fuel price increases averaged around 5 per cent per year as oil production declined and Asian demand continued to increase. However, the Global Financial Crisis (GFC) in 2008 led to a large fall in oil prices. Global uncertainty and rising unemployment in many countries during this period led to lower demand for oil, which saw fuel prices fall 20 per cent in 2009.
2014 - 2016
Following a recovery from the GFC, oil prices fell again between 2014 and 2016 reflecting strong production in the United States, which saw the highest level of US oil output in more than 100 years. This, coupled with Russia's and OPEC's decision to maintain their oil production level, resulted in a global oversupply of oil.
2020 - 2022
The COVID-19 pandemic in 2020 saw another large fall in fuel prices due to lockdowns, both domestically and in countries across the world, as people were forced to stay at home with travel restrictions in place. As consumer and commercial demand fell rapidly worldwide, this resulted in an oversupply of oil and fuel prices in Australia falling by over 20 per cent. Oil prices recovered in 2021 as COVID-19 restrictions began to ease.
The Russian invasion of Ukraine in early 2022 saw sanctions placed on Russian oil and gas, impacting global supply. This led to automotive fuel prices in Australia reaching a new record and remain high in subsequent years.
March 2026
Conflict in the Middle East and interruption of oil passing through the Strait of Hormuz reduced the supply of oil exports from the region. This supply disruption has seen significant volatility in the global price of oil, which has led to higher petrol and diesel prices all around the world.
Automotive fuel prices compared to CPI inflation
Throughout the 1980s, fuel prices increased at a faster rate than the aggregate CPI basket. During the 1990s, fuel prices were fairly stable, before rising more quickly during the 2000s and peaking in 2008, just prior to the Global Financial Crisis (GFC). Following the GFC, fuel prices were more volatile, with the 2008 peak only briefly being exceeded in 2014. Over the past decade, automotive fuel prices continued to be volatile and have increased more strongly than the CPI, even with higher CPI inflation seen in 2022 and 2023.
From 1972 to the March quarter 2026, automotive fuel prices have increased by 55 per cent more than overall inflation.