• In Sydney, most drivers notice that the petrol prices in all gas stations rise towards weekend or holiday period. Consumers are sceptical about the retailer’s explanation that price is driven purely from the supply/demand in market dynamics. The then Howard government had previously instructed the consumer watch dog ACCC to conduct an inquiry into the pricing practices in the petrol retailing industry. However, the report released by ACCC indicated that there is no concrete evidence to support the claim of price collusion amongst the major petrol retailers.

• What most Sydney drivers ignored is that actually there is a clear price pattern repeating on a weekly basis. I have closely observed the price pattern in the last three years in Sydney. What I found is that excluding the price fluctuation of the oil, in a normal week the lowest price is on Tuesday. On Wednesday morning, the price normally jumps up around 9%, then steadily rises towards around 10% on Friday/Saturday, and finally it will gradually decline to roughly the original level at the next Tuesday.
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• The consistent price pattern has puzzled me for quite sometime. However this morning when I saw a petrol container truck parking at one of the gas station, I suddenly realise that the price pattern may have something to do with the inventory cycle of the gas stations. My hypothesis is that the refilling cycle is on a weekly basis, normally once a week. On Tuesday, knowing that a refill is coming, the gas station just wants to run down the existing inventory, so they reduce price. On Wednesday, the retailer just jacks up the price to hedge any upward spike in oil price. The retailer normally can’t afford the transport cost of too frequent petrol refills.  On the other hand, they don’t want to get into the out-of-stock situation as well. There might have been other factors such as the refiners’ inventory cycle that contributes to the price pattern as well. But overall, the cyclical nature of the price pattern should still hold.
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• So it is easy for Sydney drivers to cut the petrol bill without reducing kilometers. Basically the way is to try to align the refilling cycle to that of the gas stations, which is sticking to the habit of refilling petrol on Tuesday. Even if the tank is half empty on Tuesday, it still worth to refill the half-empty tank given the 10% difference in price.
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• For drivers outside of Sydney or even in other countries, this method still applies. The trick is to observe the price patterns of a particular gas station in a two consecutive month’s period. The price pattern may be on a fortnightly basis depending on the population of the city. The cheapest price may be on Wednesday rather than Tuesday depending on the station’s inventory cycle. You just need to find that out.
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• The major petrol retailers were vindicated when ACCC report was released to the public. It may be right that the petrol price is mainly driven by the supply and demand. Smart consumers just need to find out the price pattern and take advantage of it to save money. It is not that hard after all. Furthermore, it is actually also good for the retailers as well since it reduces the inventory management cost if consumer demand matches perfectly by their supply. It is a win-win for all parties - the consumers reduce petrol bill without reducing their kilometres whereas the retailer reduces the inventory management cost and the associated carbon emissions.
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• If any readers know the petrol pricing pattern of the other cities, please drop us a note to This e-mail address is being protected from spam bots, you need JavaScript enabled to view it   We would like to share that with a wider audience as we believe that the best way to promote sustainability is to enable average people to realise the finanical benefit of sustainable practices.

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