Retail fuel market modelling

This project aims to model key segments of Australia’s retail fuel market to assess the impacts of various fuel pricing schemes and regulatory options in a changing market. The project focuses on modelling current and alternative pricing schemes in metropolitan South-East Queensland, to inform more equitable policy options.

It will also evaluate the effects of large-scale electrification, liquid fuel market contraction, and the rise of low-carbon alternatives.

This project will support RACQ’s advocacy, member services, and strategic planning, while also providing a valuable foundation for future projects to improve Australia’s transport systems more broadly.

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Participants

• RACQ
• Queensland University of Technology

Project background

This project aims to deepen understanding of Australia’s transitioning retail fuel market to inform strategic, policy, and regulatory decisions by key stakeholders, including government.
It focuses on promoting competition and improving equity for consumers—particularly in regions with varying fuel prices—in a changing market with the shift away from fossil fuels towards more sustainable energy sources.

By modelling dynamic market segments and pricing schemes, the project will generate insights that help balance affordability, access, and emissions reduction in a rapidly evolving transport energy landscape.

In order to achieve these aims, the project will develop analytical models for the current market and agent-based models to forecast impacts of regulatory options as well as broader market changes, including large-scale electrification and the resulting contraction of the liquid fuel market; and the emergence of new low-carbon liquid fuel markets.

Firstly, the project aims to develop analytical models for the current Greater Brisbane Unleaded Petrol (ULP) market and likely responses to potential new price regulations. The ULP market in Greater Brisbane follows a price cycle that typically lasts six to eight weeks with prices following a saw tooth pattern. On the cheapest days, the average price is a few cents per litre above the average wholesale price, and on the most expensive days more than 40 cents above average wholesale.

The cycle is largely independent of wholesale prices and continues unabated even when the wholesale price remains unchanged. Other states in Australia also have their own cycle, however in 2024 (calendar year) Greater Brisbane was the most expensive capital city in Australia and Perth was the cheapest.

Greater Brisbane 2-car households paid $324 per annum more than Perth. Citywide this accounted for almost $350 million more. Phase 1 of the current project aims to model different policies and regulations for metropolitan South-east Queensland (including Brisbane area) that can potentially reduce fuel cost and lower the price hikes in the fuel market, enabling an improved fuel market which is fairer for consumers and all stakeholders. This modelling also provides a foundation for Phase 2 work.

Secondly, with large scale electrification of the vehicles (EV and hybrid), the retail fuel market will undergo a massive change both in terms of the volume and type of fuels in the market. Phase 2 of this project aims to gain a deeper understanding of the market in transition, reducing fossil fuel use.

This phase will support a better understanding of the dynamic relationship between equity (e.g., fuel access and pricing for consumers) and sustainability (emissions) in a changing fuel market. The proposed modelling, insights and report can inform strategy, policy (e.g., regulatory options), and (infrastructure) planning, relevant to all transport ecosystem stakeholders.

This project has wide implications for and the potential to be scaled across and improve Australia’s dynamic transport ecosystem.

Project objectives

The primary objectives of this project are to:

1. Develop three analytical models to forecast impacts of regulatory options to the SEQ retail fuel market (Phase 1)
2. Develop analytical models to assess the impact of broader sustainability related market transitions and structural changes to the retail fuel market (Phase 2)

Please note …

This page will be a living record of this project. As it matures, hits milestones, etc., we’ll continue to add information, links, images, interviews and more. Watch this space!