Iran war: Petrol above $3 still on the cards, watchdog finds fuel firms not gouging
Friday, 13 March 2026
Petrol companies haven’t raised the price of fuel since the start of war in the Middle East beyond what has been justified, the Commerce Commission says, but in part because of that prices look set to keep marching higher.
Data gathered by the Ministry of Business, Innovation and Employment suggests their average gross margin on petrol for the week ending Wednesday plummeted by 40% to less than 30 cents a litre and their weekly margin on diesel fell to virtually zero.
That indicates they were still playing “catch-up” with the rising cost of replacing their fuel, which has taken another turn for the worse with diesel at $3 a litre now looking possible.
Commerce Commission commissioner Bryan Chapple said it would use more frequent reporting to call out any pricing behaviours that were unjustified, but its own initial analysis raised no concerns. The commission has released the first of a planned series of monitoring reports.
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“The gap between rising international costs and slower retail movements aligns with patterns seen during previous global shocks,” he said.
“We want consumers to feel confident that petrol price increases are justified and that decreases in global costs are passed through to retail prices as quickly as the increases have been.”
Price comparison sites indicate a growing number of petrol stations were selling petrol at a sticker price of $2.99.9 a litre, before any discounts, on Friday morning, with a few topping $3 but with a wide range of pricing in the market.
That compares with an average actual selling price of about $2.50 before the conflict.
Diesel prices have moved up at a higher percentage rate — reflecting a steeper increase in overseas refining margins — from an average of about $1.90 a litre before the US and Israeli strikes on the Iranian regime on February 28.
A growing number of fuel outlets are pricing diesel at or above $2.50 a litre, but some are still selling the fuel for less.
Key petrol and diesel benchmarks that the Australian Institute of Petroleum says reflect the cost of buying refined fuels from Asia suggest that prices of anywhere between $3 and $3.30 litre for 91 Octane fuel could have been justified this week, as the price of oil and refining margins have bobbed about.
The cost of the diesel benchmark it quoted had more than doubled to A$275 a barrel on Thursday, from A$130 a barrel, pre-conflict, while the key benchmark for unleaded petrol had jumped to A$205 a barrel, from A$115 pre-conflict.
The price of Brent crude has risen over the past two days, from about US$90 a barrel to trade at just over US$100 a barrel this afternoon.
The retail price of fuel would not be expected to move at the same rate as the cost of refined fuel, as much of the retail price is determined by fixed-cost taxes and levies.
But the Singaporean benchmarks suggest petrol prices significantly above $3 a litre remain on the cards and that diesel at $3 litre is also now real possibility.
Capital Economics senior climate and commodities economist Kieran Tompkins said fuel traders were bracing for “prolonged disruption”.
“Investors in the options market put a one-in-five chance of Brent crude prices being US$100 a barrel or higher in three months’ time,” he said.