Petrol prices are climbing, and if you have been to a servo lately, you may have noticed prices changing more often than usual. With conflict in the Middle East threatening fuel supply chains, and reports of panic buying and stations running dry across NSW, many people are asking the same question: is there actually a law that prevents service stations from hiking prices whenever they like?

The short answer is no, but the law does impose some important obligations on how those prices are reported and displayed.

Can Service Stations Set Their Own Prices?

Yes. There is no general law in NSW that caps retail fuel prices or restricts when or how much a station can increase them. Operators are free to set their own prices and change them as often as they choose.

A station might raise prices because wholesale costs have gone up, because of exchange rate movements, because demand is high before a long weekend, or simply because of local market conditions. Legally, operators are not required to justify any of those reasons.

There is also no general NSW rule preventing multiple price changes in a single day.

What About Global Events Like Middle East Conflict?

A service station can generally raise prices in response to high demand or constrained supply, including where overseas events affect fuel markets.

The current situation in the Middle East illustrates this clearly. Refineries and energy assets appear to be among the targets of ongoing conflict, and the Strait of Hormuz, a critical waterway between Iran and the UAE, is under increasing pressure. That strait is used for the transit of an estimated 20 to 25 per cent of global oil consumption, moving product from Middle Eastern producers to parts of Asia and beyond.

When supply through a chokepoint of that scale is disrupted, countries that normally rely on it must source oil elsewhere. That competition for alternative supply pushes up prices globally, and Australian motorists tend to feel the effects at the pump relatively quickly.

What Rules Do Service Stations Have to Follow?

While operators can set prices freely, they are required to participate in the FuelCheck system administered by NSW Fair Trading.

Under that system, service station operators must notify NSW Fair Trading of their current standard retail price for each fuel type. This means the ordinary price available to all customers, not a discounted price tied to a docket, loyalty card or other condition.

In practical terms, three things should match:

• the FuelCheck price
• the roadside sign
• the pump price

When Does a Price Rise Become Unlawful?

Rarely because of the size of the increase alone. A price rise is more likely to attract legal scrutiny if:

• the FuelCheck system is not updated to reflect the current price
• the roadside signboard is inaccurate or misleading
• advertised discounts are deceptive
• the price has been set through unlawful collusion or price fixing with competitors

The focus of consumer protection law in this area is on transparency and accuracy, not on whether a particular price is considered too high.

What Can You Do?

If you believe a service station is not accurately displaying its prices, or that the FuelCheck listing does not match what you were charged, you can report the discrepancy to NSW Fair Trading.

If you have a broader consumer law concern, or you are unsure about your rights in a particular situation, it is worth getting proper advice.

Contact our experienced team to discuss your situation.