When conflict breaks out in the Middle East, when OPEC cuts production, or when major economies post better-than-expected growth numbers, you can almost guarantee that petrol prices in Perth will follow suit within a few weeks. The connection between global crude oil markets and your weekly fuel bill is real and surprisingly direct once you understand the supply chain.
This guide explains exactly how a barrel of Brent crude priced in US dollars on the Intercontinental Exchange in London eventually determines what you pay at the bowser on Great Eastern Highway.
What is Brent crude oil?
Brent crude is the world's primary oil price benchmark. Extracted from the North Sea fields off the coasts of the United Kingdom and Norway, it sets the reference price for roughly two-thirds of all globally traded oil. When you see international headlines like "Oil drops to $75 a barrel," they are almost always referring to Brent crude.
The other major benchmark is West Texas Intermediate (WTI), which is the US domestic price and tends to track Brent closely with a small premium or discount depending on market conditions. Australia primarily uses Brent as its reference, with Singapore Mogas (explained below) acting as the more immediate pricing mechanism.
Quick fact: Australia imports roughly 90% of its transport fuel. This means domestic production has almost no effect on retail prices — WA motorists are entirely exposed to global commodity market movements.
From crude to pump: the Australian supply chain
Here is the journey that crude oil makes before it reaches your fuel tank in Perth:
- Crude oil is extracted from fields in the Middle East, US, Russia, or elsewhere and sold at Brent, WTI, or regional benchmark prices.
- Crude is refined into petroleum products, primarily at refineries in Singapore (the main refining hub for the Asia-Pacific region).
- Refined product (Mogas) is priced at Singapore as "Singapore Mogas" and this price, denominated in USD per barrel, is the true wholesale input cost for Australian fuel.
- Product is shipped to import terminals in Fremantle and Kwinana, adding shipping and insurance costs.
- Terminal gate price (TGP) is set by fuel importers (BP, Ampol, Viva Energy, Puma) and reflects refined product cost, shipping, terminal costs, and importer margins.
- Retailers add their margin and government taxes to arrive at the final pump price.
The role of the Australian dollar
Because oil and refined products are priced globally in US dollars, the AUD/USD exchange rate is the second most important factor in WA fuel prices, after the crude price itself. When the Australian dollar weakens against the USD, buying the same barrel of oil costs more Australian dollars, which flows directly into higher TGPs and then pump prices.
Conversely, a strong Australian dollar (for example, above USD 0.70) effectively subsidises fuel costs for Australians. During periods of dollar weakness (such as the 2020 COVID crash or the 2022-2023 period where AUD fell below USD 0.62), petrol prices in Perth remained elevated even when global crude prices were not especially high.
| Scenario | Effect on WA pump price |
|---|---|
| Brent crude rises 10% | Pump price increases ~5-8 cents/litre over 2-4 weeks |
| AUD falls 5% vs USD | Pump price increases ~3-5 cents/litre over 1-2 weeks |
| Brent rises 10% AND AUD falls 5% | Combined effect: ~10-14 cents/litre increase |
| Brent falls 10% | Pump price decreases ~4-6 cents/litre over 2-4 weeks |
Why prices at the pump lag global markets
Fuel prices in Perth do not change in real time with oil markets. There is a structural lag of two to four weeks between a movement in international crude oil prices and its appearance at service stations. This happens for several reasons:
- Transit time: Oil tankers take weeks to travel from the Middle East or Singapore to Australian ports.
- Inventory: Large fuel importers hold weeks of stock at Australian terminals. They must sell existing inventory before newer, more expensive (or cheaper) stock is reflected at TGP.
- Contract cycles: Many fuel supply contracts are settled on average prices over a month or a fortnight rather than daily spot prices.
This lag cuts both ways. When crude prices spike, you will not feel the full impact immediately. But by the same token, when crude falls sharply, WA pump prices are slow to follow, meaning consumers often do not benefit from oil price drops as quickly as they feel price increases.
Refinery margins and Singapore Mogas
The price that matters most to Australian importers is not actually Brent crude but the price of Singapore 95 RON Mogas (motor gasoline) and Singapore gasoil (diesel). These are the finished products imported to Australia.
The difference between the crude oil price and the refined product price is called the refinery crack spread. When refinery capacity is tight globally (such as after a major hurricane in the US Gulf Coast or planned refinery maintenance shutdowns), crack spreads widen, meaning refined petrol becomes more expensive even if crude oil is stable or falling. Australians experienced this in 2022 when a global refinery shortage caused pump prices to remain elevated despite crude stabilising.
Taxes and levies in the petrol price breakdown
Approximately 40-45% of what you pay at a Perth servo is made up of government taxes and levies that have nothing to do with crude oil prices:
| Component | Approximate amount (2025) | Description |
|---|---|---|
| Fuel excise | ~48.8 cents/litre | Federal government tax, indexed to CPI twice per year |
| GST | 10% of total price | Applied to the full pump price including excise |
| Wholesale cost (incl. crude) | Varies with oil price | Roughly 40-55 cents/litre when Brent is at USD 70-90/bbl |
| Retail margin | ~4-8 cents/litre | Service station profit margin |
Because excise and GST are fixed or percentage-based components, they do not shrink when oil prices fall. This means that when crude is cheap, taxes represent a higher share of the pump price, and the benefit to consumers is proportionally smaller than the crude price reduction would initially suggest.
How to track the connection in real time
EconomicWatch displays a live Brent crude oil price widget sourced from Yahoo Finance. Watching this figure over days and weeks, alongside current WA pump prices, allows you to anticipate whether petrol prices are likely to rise or fall in your area in the coming weeks.
A useful rule of thumb: a sustained move of USD 10 per barrel in Brent crude typically translates to a move of roughly 6 to 10 cents per litre at Australian pumps after the two-to-four-week lag period, assuming the AUD/USD rate is stable.
Track Brent Crude and Live WA Fuel Prices Together
EconomicWatch shows you both the real-time Brent crude price and live WA fuel data side by side, so you can see the connection for yourself.
Open EconomicWatch →