❓ Mr Bradshaw questions why a 30% drop in US crude oil prices hasn't translated to lower petrol, diesel, and LPG prices at the pump in WA. The answer explains Australia's world parity pricing policy, the influence of Singapore marker prices, and other factors affecting fuel costs.
AnsweredQoN 1131Legislative Assembly
QuestionView source ↗
Now that the United States price of crude oil has fallen 30% in the last few months, why hasn’t this been reflected in the price of petrol, diesel and LPG at the bowser?
AnswerView source ↗
Answered
6 November 2001
Responded by
Minister for Consumer and Employment Protection
Response time
21 days
Successive Commonwealth Governments have adopted a world parity pricing policy as the basis for setting Australian prices for petroleum products. This policy ensures that Australian petroleum producers do not export product required for local use on the basis of higher prices they could obtain offshore. The Australian Competition and Consumer Commission also uses import parity markers to monitor the level of competitiveness of the Australian petroleum market. Singapore is the largest producer of refined petroleum in South East Asia and their wholesale price is generally accepted as being the international benchmark used by local producers when determining the wholesale price of petroleum in Western Australia. By this Perth retail prices are indirectly linked to crude oil prices. Singapore prices do not always trend exactly in line with world crude oil prices. This can be seen on the attached Graph A. Perth retail prices however are directly linked to Singapore marker prices. This correlation can also be seen in Graph A which demonstrates a downward trend in metropolitan unleaded prices since mid September. Graph B shows that unleaded petrol prices in non-metropolitan Western Australia have also trended downwards since mid September. Falls in the price of crude oil usually, but not always, flow through to Singapore wholesale petroleum prices. Several other external influences also impact upon the Singapore refined price. For example, if Singapore refineries wish to limit production, or demand outstrips supply in the Asian region, this will result in higher wholesale and retail prices. In relation to diesel prices, whilst a different Singapore marker is used, Graphs C and D indicate that, particularly in the non-metropolitan areas, diesel prices are tracking the Singapore marker price and have shown a downwards trend since mid September. Metropolitan diesel prices have also trended downwards over the same period but not to the extent shown in non-metropolitan Western Australia. This can be attributed, in part, to the significantly higher volume of diesel sold in the non-metropolitan area. Lower volume sales limit competition in the metropolitan diesel market. With regards to LPG, the price of crude oil does not influence the price of local LPG product. The Saudi Arabian Aramco Contract price is set monthly independent of crude oil prices and this marker is used to price Australian LPG under the import parity pricing arrangements.
Singapore is the largest producer of refined petroleum in South East Asia and their wholesale price is generally accepted as being the international benchmark used by local producers when determining the wholesale price of petroleum in Western Australia. By this Perth retail prices are indirectly linked to crude oil prices. Singapore prices do not always trend exactly in line with world crude oil prices. This can be seen on the attached Graph A. Perth retail prices however are directly linked to Singapore marker prices. This correlation can also be seen in Graph A which demonstrates a downward trend in metropolitan unleaded prices since mid September. Graph B shows that unleaded petrol prices in non-metropolitan Western Australia have also trended downwards since mid September. Falls in the price of crude oil usually, but not always, flow through to Singapore wholesale petroleum prices. Several other external influences also impact upon the Singapore refined price. For example, if Singapore refineries wish to limit production, or demand outstrips supply in the Asian region, this will result in higher wholesale and retail prices. In relation to diesel prices, whilst a different Singapore marker is used, Graphs C and D indicate that, particularly in the non-metropolitan areas, diesel prices are tracking the Singapore marker price and have shown a downwards trend since mid September. Metropolitan diesel prices have also trended downwards over the same period but not to the extent shown in non-metropolitan Western Australia. This can be attributed, in part, to the significantly higher volume of diesel sold in the non-metropolitan area. Lower volume sales limit competition in the metropolitan diesel market. With regards to LPG, the price of crude oil does not influence the price of local LPG product. The Saudi Arabian Aramco Contract price is set monthly independent of crude oil prices and this marker is used to price Australian LPG under the import parity pricing arrangements.
Singapore prices do not always trend exactly in line with world crude oil prices. This can be seen on the attached Graph A. Perth retail prices however are directly linked to Singapore marker prices. This correlation can also be seen in Graph A which demonstrates a downward trend in metropolitan unleaded prices since mid September. Graph B shows that unleaded petrol prices in non-metropolitan Western Australia have also trended downwards since mid September. Falls in the price of crude oil usually, but not always, flow through to Singapore wholesale petroleum prices. Several other external influences also impact upon the Singapore refined price. For example, if Singapore refineries wish to limit production, or demand outstrips supply in the Asian region, this will result in higher wholesale and retail prices. In relation to diesel prices, whilst a different Singapore marker is used, Graphs C and D indicate that, particularly in the non-metropolitan areas, diesel prices are tracking the Singapore marker price and have shown a downwards trend since mid September. Metropolitan diesel prices have also trended downwards over the same period but not to the extent shown in non-metropolitan Western Australia. This can be attributed, in part, to the significantly higher volume of diesel sold in the non-metropolitan area. Lower volume sales limit competition in the metropolitan diesel market. With regards to LPG, the price of crude oil does not influence the price of local LPG product. The Saudi Arabian Aramco Contract price is set monthly independent of crude oil prices and this marker is used to price Australian LPG under the import parity pricing arrangements.
Falls in the price of crude oil usually, but not always, flow through to Singapore wholesale petroleum prices. Several other external influences also impact upon the Singapore refined price. For example, if Singapore refineries wish to limit production, or demand outstrips supply in the Asian region, this will result in higher wholesale and retail prices. In relation to diesel prices, whilst a different Singapore marker is used, Graphs C and D indicate that, particularly in the non-metropolitan areas, diesel prices are tracking the Singapore marker price and have shown a downwards trend since mid September. Metropolitan diesel prices have also trended downwards over the same period but not to the extent shown in non-metropolitan Western Australia. This can be attributed, in part, to the significantly higher volume of diesel sold in the non-metropolitan area. Lower volume sales limit competition in the metropolitan diesel market. With regards to LPG, the price of crude oil does not influence the price of local LPG product. The Saudi Arabian Aramco Contract price is set monthly independent of crude oil prices and this marker is used to price Australian LPG under the import parity pricing arrangements.
In relation to diesel prices, whilst a different Singapore marker is used, Graphs C and D indicate that, particularly in the non-metropolitan areas, diesel prices are tracking the Singapore marker price and have shown a downwards trend since mid September. Metropolitan diesel prices have also trended downwards over the same period but not to the extent shown in non-metropolitan Western Australia. This can be attributed, in part, to the significantly higher volume of diesel sold in the non-metropolitan area. Lower volume sales limit competition in the metropolitan diesel market. With regards to LPG, the price of crude oil does not influence the price of local LPG product. The Saudi Arabian Aramco Contract price is set monthly independent of crude oil prices and this marker is used to price Australian LPG under the import parity pricing arrangements.
With regards to LPG, the price of crude oil does not influence the price of local LPG product. The Saudi Arabian Aramco Contract price is set monthly independent of crude oil prices and this marker is used to price Australian LPG under the import parity pricing arrangements.
Singapore is the largest producer of refined petroleum in South East Asia and their wholesale price is generally accepted as being the international benchmark used by local producers when determining the wholesale price of petroleum in Western Australia. By this Perth retail prices are indirectly linked to crude oil prices. Singapore prices do not always trend exactly in line with world crude oil prices. This can be seen on the attached Graph A. Perth retail prices however are directly linked to Singapore marker prices. This correlation can also be seen in Graph A which demonstrates a downward trend in metropolitan unleaded prices since mid September. Graph B shows that unleaded petrol prices in non-metropolitan Western Australia have also trended downwards since mid September. Falls in the price of crude oil usually, but not always, flow through to Singapore wholesale petroleum prices. Several other external influences also impact upon the Singapore refined price. For example, if Singapore refineries wish to limit production, or demand outstrips supply in the Asian region, this will result in higher wholesale and retail prices. In relation to diesel prices, whilst a different Singapore marker is used, Graphs C and D indicate that, particularly in the non-metropolitan areas, diesel prices are tracking the Singapore marker price and have shown a downwards trend since mid September. Metropolitan diesel prices have also trended downwards over the same period but not to the extent shown in non-metropolitan Western Australia. This can be attributed, in part, to the significantly higher volume of diesel sold in the non-metropolitan area. Lower volume sales limit competition in the metropolitan diesel market. With regards to LPG, the price of crude oil does not influence the price of local LPG product. The Saudi Arabian Aramco Contract price is set monthly independent of crude oil prices and this marker is used to price Australian LPG under the import parity pricing arrangements.
Singapore prices do not always trend exactly in line with world crude oil prices. This can be seen on the attached Graph A. Perth retail prices however are directly linked to Singapore marker prices. This correlation can also be seen in Graph A which demonstrates a downward trend in metropolitan unleaded prices since mid September. Graph B shows that unleaded petrol prices in non-metropolitan Western Australia have also trended downwards since mid September. Falls in the price of crude oil usually, but not always, flow through to Singapore wholesale petroleum prices. Several other external influences also impact upon the Singapore refined price. For example, if Singapore refineries wish to limit production, or demand outstrips supply in the Asian region, this will result in higher wholesale and retail prices. In relation to diesel prices, whilst a different Singapore marker is used, Graphs C and D indicate that, particularly in the non-metropolitan areas, diesel prices are tracking the Singapore marker price and have shown a downwards trend since mid September. Metropolitan diesel prices have also trended downwards over the same period but not to the extent shown in non-metropolitan Western Australia. This can be attributed, in part, to the significantly higher volume of diesel sold in the non-metropolitan area. Lower volume sales limit competition in the metropolitan diesel market. With regards to LPG, the price of crude oil does not influence the price of local LPG product. The Saudi Arabian Aramco Contract price is set monthly independent of crude oil prices and this marker is used to price Australian LPG under the import parity pricing arrangements.
Falls in the price of crude oil usually, but not always, flow through to Singapore wholesale petroleum prices. Several other external influences also impact upon the Singapore refined price. For example, if Singapore refineries wish to limit production, or demand outstrips supply in the Asian region, this will result in higher wholesale and retail prices. In relation to diesel prices, whilst a different Singapore marker is used, Graphs C and D indicate that, particularly in the non-metropolitan areas, diesel prices are tracking the Singapore marker price and have shown a downwards trend since mid September. Metropolitan diesel prices have also trended downwards over the same period but not to the extent shown in non-metropolitan Western Australia. This can be attributed, in part, to the significantly higher volume of diesel sold in the non-metropolitan area. Lower volume sales limit competition in the metropolitan diesel market. With regards to LPG, the price of crude oil does not influence the price of local LPG product. The Saudi Arabian Aramco Contract price is set monthly independent of crude oil prices and this marker is used to price Australian LPG under the import parity pricing arrangements.
In relation to diesel prices, whilst a different Singapore marker is used, Graphs C and D indicate that, particularly in the non-metropolitan areas, diesel prices are tracking the Singapore marker price and have shown a downwards trend since mid September. Metropolitan diesel prices have also trended downwards over the same period but not to the extent shown in non-metropolitan Western Australia. This can be attributed, in part, to the significantly higher volume of diesel sold in the non-metropolitan area. Lower volume sales limit competition in the metropolitan diesel market. With regards to LPG, the price of crude oil does not influence the price of local LPG product. The Saudi Arabian Aramco Contract price is set monthly independent of crude oil prices and this marker is used to price Australian LPG under the import parity pricing arrangements.
With regards to LPG, the price of crude oil does not influence the price of local LPG product. The Saudi Arabian Aramco Contract price is set monthly independent of crude oil prices and this marker is used to price Australian LPG under the import parity pricing arrangements.
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