How do petrol thefts respond to changing prices?

Summary

Background

There is a well-established correlation between petrol prices and petrol thefts (fail to pay incidents) in NSW and elsewhere. However, petrol thefts in NSW rose sharply between 2022 and 2024, while petrol prices remained relatively stable (Figure 1). This raises the question of whether the previously observed relationship between prices and thefts has changed over time, or whether other unknown factors could be driving recent trends.

In this context, this study examines whether higher petrol prices cause increases in petrol thefts, and whether broader economic conditions can also help explain changes in theft over time. To do so, it uses two empirical approaches to test whether higher petrol prices cause higher petrol thefts, and a third approach to model the association between the level of thefts and broader economic conditions (such as living costs, wages and the population).  

Key findings

We find that increases in petrol prices causally lead to higher petrol thefts, consistent with the strong correlation observed in recent years (Figure 1). Our estimates suggest that a 1% increase in petrol prices would lead to a 3% increase in monthly petrol thefts. We find no immediate effect of daily petrol price differences on thefts, likely because daily price variation is small and thefts may require some planning. 

However, medium-term associations suggest that broader economic factors may be more strongly related to petrol thefts than petrol prices. Our error correction model shows that while the medium-term level of petrol theft is positively associated with petrol prices, it has stronger relationships with living costs and wages. This may indicate that broader economic factors play an important role in theft decisions, consistent with their larger impact on budgets relative to petrol prices. 

Conclusion

We find that higher petrol prices lead to higher petrol thefts, but that other economic conditions like living costs and wages are likely to be more important for the level of petrol thefts over the medium term.