Rule 303 said:
Every explanation I’ve ever heard for fuel pricing falls flat on its face when presented with the real world:
Don’t understand Darwin, but the rest make perfect sense.
In places with very little competition between petrol stations, in this case Canberra and Hobart, the petrol sale price fairly well follows the bulk cost to the petrol stations.
As competition increases, in this case Perth, each petrol station prices itself just under what its neighbour used as a price the day before, creeping downward until the low price becomes unsustainable and jumps upwards by exactly 10, 20 or 30 cents per litre in order to fool inattentive drivers into thinking that the price hasn’t changed.
Initially this, as in Perth, cycles weekly in sync with the demand which varies between weekdays and weekends.
But then long distance drivers get wise to the weekly cycle of prices, and only buy petrol on the day of the week where they know it’s going to be lowest. So to overcome this, we have the service stations slowly deceasing their prices to beat their competitors, but jumping up on random days. We see this most clearly in the Brisbane chart. But you also see the slow drop and jump up in charts for Sydney, Melbourne and Adelaide. The rise doesn’t appear as precipitous in for example Sydney because difterent batches of petrol stations in the city time their price jump on different days.
The whole purpse of the cycles is to outcompete the neighbouring petrol stations while at the same time fooling the drivers into buying petrol at as high a price as possible.
It ought to be possible to write a little computer program to generate these patterns.
