Fueling the Crisis

How Rising Petrol Prices Drive Up Australia’s Cost of Living

Nuwin Fernando (s3943472) – MATH2237/MATH2270

1. Introduction

Australia is experiencing a cost-of-living crisis, and petrol prices have become a central contributor. This presentation explores how fuel prices have changed across states and their relationship with transport-related inflation.

2. Research Question

How have fuel prices changed in Australia between 2020 and 2024, and what role have they played in rising transport costs (CPI)?

We aim to: - Track petrol price trends across Australian states - Compare national fuel prices to CPI (Transport) - Forecast future fuel prices

3. Data Preparation

✅ Interpretation:
Data has been reshaped and aggregated to monthly and quarterly levels for better clarity. This allows direct comparison between fuel trends and CPI transport data.

4. National Monthly Fuel Price Trend

📊 Interpretation:
Petrol prices rose sharply starting in 2021, peaking in 2022 and 2024. This reflects global events and local inflationary pressures.

6. CPI Transport Index Trend

🚗 Interpretation:
The transport CPI index increased significantly, particularly in periods following spikes in fuel prices — suggesting a lagged inflationary impact.

7. Fuel vs CPI Transport Comparison

📈 Interpretation:
Fuel prices and CPI Transport move closely together. Fuel acts as a leading indicator, with CPI reacting shortly after major fuel price surges.

8. Forecasting Petrol Prices (ARIMA)

🔮 Interpretation:
The model predicts fuel prices will remain elevated through 2025. Continued inflationary pressure on transport and households is likely.

9. Summary of Findings

  • Petrol prices surged by over 30% between 2020–2024.
  • WA showed more stable pricing; NSW and VIC higher averages.
  • CPI Transport trends closely follow fuel prices.
  • Fuel prices can signal future inflation pressures.
  • Without intervention, transport costs may continue to climb.

10. References