While arguable, some contend a small market like Australia cannot support a functional free market with US or EU style competition. There are not enough players. The faux competition within various segments, such as petrol, makes headlines, but. The headline prices for 91 moves in lockstep and in sales regions. Even in suburban Melbourne my area is always $0.01-.02 higher than 5 km down the road, and when I head out of the metro area it goes down by about $0.02 from the metro area, as I enter the same rural shire each time - each being a different sales region.
In the metro areas we still "enjoy" the price cycles that have questionable relationship to anything excepting a game to increase the average price paid per litre. One station goes up they all magically go up the same day, the same amount. Sure there are minor +/- variations, and sure sometimes one goes up and nobody follows, but it does not pass the pub test that it is coincidental, unless every company is running to an identical business plan with identical costs and identical decision making. Maybe they are, but what are the odds? As you wrote, they can charge what they like, and with unbridled unregulated capitalism it is about maximising profit any way one can within the law. Whether the law should have a part in pricing for critical services (utilities, petrol, medical care, et al) is a difference in personal values and thus ideology.