Petrol price cycles occur at the retail level as petrol stations compete to gradually lower prices to attract the price sensitive customers (most customers just go where’s convenient and, weirdly, some others are brand loyal). It takes a couple of weeks for the price to drop as they gradually undercut each other. Eventually a few retailers get new fuel deliveries and decide it’s not worth charging so little to attract the few price sensitive customers so they decide to up the price. There’s no point going up by a couple of cents (you lose the price sensitive customers anyway) so they jack up the price all the way. The price goes high enough to build up money to pay for the bottom of the next cycle. Once one jumps the others think why am I the mug charging 30c less than my competition so they quickly follow.

The ACCC has found price cycles only occur in competitive large city markets and on average we are better off. Those without petrol price cycles (or diesel buyers) are on average worse off.