Seasonal patterns in daily prices of unleaded petrol across Australia

Abstract

This study addresses a very significant policy issue not previously examined at a disaggregated level for Australia by identifying on which day(s) petrol is more expensive and in which locations discount days are non-existent. After conducting a time series analysis of the day of the week effect in retail prices of unleaded petrol in 114 locations across Australia (Jan 2005 to Apr 2012), it is observed that prices mostly peak on Thursday/Friday and then decline until they hit their cyclical trough mainly on Sunday/Tuesday. However, these daily differences are only statistically significant in capital cities or large regional centres. A cross-sectional analysis of the mean prices during the period Nov 2007 to Feb 2012 shows that (a) in remote and less populous locations, where sales are presumably limited and overhead costs are high, petrol is more expensive; (b) petrol generally costs more in places which exhibit less price variability. The disaggregated and location-specific results can increase our understanding of Australia's retail petrol market and can be beneficial to motorists as well as various government and non-government organisations such as the ACCC (Australian Competition and Consumer Commission), AAA (Australian Automobile Association) and FuelWatch.