Petrol prices are front of mind for drivers across NSW right now. A combination of conflict in the Middle East, threats to global oil supply, and what appears to be a wave of panic buying has pushed fuel prices higher at the bowser — with some servos reportedly running out of stock altogether. It is reminiscent of the rush on supermarket shelves during the early days of COVID-19, except this time the concern is fuel, not toilet paper.
With prices climbing and frustration mounting, many people are asking a reasonable question: is there a law that stops service stations from simply hiking prices whenever they feel like it?
The short answer is no — but that does not mean they can do whatever they like.
Can Service Stations Raise Their Prices Whenever They Choose?
Yes. There is no general law in NSW that caps retail fuel prices or restricts when or how often a service station can increase them. Operators are free to set their own prices and change them at any time, including multiple times in a single day.
A station may raise prices because wholesale costs have increased, because of exchange rate movements, because demand is high before a long weekend, or simply because of local competitive conditions. There is no legal requirement to justify any of those decisions.
What About Global Events Like a Middle East Conflict?
A service station can lawfully raise prices in response to high demand or constrained supply, including where overseas events affect global fuel markets. Disruptions caused by conflict that threaten shipping routes, refinery operations, or crude oil supply chains are legitimate commercial reasons for price adjustments.
The current situation in the Strait of Hormuz illustrates this clearly. The Strait is a waterway between Iran and the UAE, and it is estimated to be the transit point for around 20 to 25 per cent of global oil consumption, moving fuel from Middle Eastern producers to parts of Asia and beyond. When that waterway is under threat, the flow-on effects are significant: countries that normally source oil through the Strait must find alternative supply, prices rise globally, and the reduced volume reaching international markets creates a genuine choke point.
Even though the conflict is geographically distant, its impact on supply is real, and the law recognises that market forces — including disruptions to global supply — are a valid basis for price changes.
So What Rules Do Service Stations Actually Have to Follow?
The main legal obligation is compliance with the NSW FuelCheck system.
Service station operators are required to notify NSW Fair Trading of their current standard retail price for each fuel type. This must be the ordinary price available to all customers — not a discounted price tied to a loyalty card, docket, or other condition.
In practice, three things must match:
- the price listed on FuelCheck,
- the roadside sign, and
- the price at the pump.
When Does a Price Rise Become Unlawful?
A price rise is rarely unlawful simply because it is high. The more likely grounds for a legal issue arise from how the price is reported and displayed, not from the size of the increase.
A price rise may be unlawful if:
- FuelCheck has not been updated to reflect the current price,
- the roadside signboard shows a different price to what is charged at the pump,
- discounts or promotions are promoted in a misleading way, or
- the price has been set through unlawful collusion or price fixing between competing operators.
Competition and Consumer Act obligations also apply. If competitors are coordinating prices rather than setting them independently, that is a matter for the Australian Competition and Consumer Commission (ACCC), not simply a question of retail pricing freedom.
What This Means for You
If you are filling up and the pump price does not match what was advertised on the roadside sign or on FuelCheck, that is worth noting and, if needed, reporting to NSW Fair Trading. Operators have a clear obligation to keep their reported prices accurate and consistent.
For businesses, the fuel situation is a timely reminder that global events can have direct and rapid effects on operating costs — from transport and logistics to supply chains more broadly. Understanding your contractual obligations and protections when costs shift unexpectedly is an important part of managing commercial risk.
If you have questions about commercial contracts, pricing obligations, or how supply disruptions may affect your business arrangements, our experienced team is here to help. Contact us to discuss your situation.
