Prime Minister Anthony Albanese announced Wednesday he will convene an emergency national cabinet meeting as Australia's fuel crisis enters its third week.
TLDR
Prime Minister Anthony Albanese will convene an emergency national cabinet on Thursday as Australia's fuel crisis escalates. The government has released 20% of national reserves to ease regional shortages. Deputy PM Richard Marles refused to rule out rationing if the Iran conflict continues. Unleaded is now $2.25 per litre.
KEY TAKEAWAYS
Albanese, currently in Tasmania, will chair the meeting by video on Thursday. All state premiers and territory chief ministers will attend.
Reserves released
The federal government has released 20% of its national fuel stockpile. The reserves are being directed to regional areas, where shortages have been most severe.
Some petrol stations in regional Australia have run dry. Farmers have warned they cannot access the diesel needed to run their operations.
I'll convene the national cabinet of all the premiers and chief ministers to ensure the co-ordination that's occurring right across our country maximises the benefit for business, for farmers, for our communities.
— Prime Minister Anthony Albanese
The government maintains that fuel shipments are arriving in Australia at normal levels. It has identified panic buying as the main driver of localised shortages.
Rationing not ruled out
Deputy Prime Minister Richard Marles declined to rule out fuel rationing on Wednesday.
Obviously, this is a function of how long this conflict continues, and that's not something that I can answer in terms of what's going to happen.
— Deputy Prime Minister Richard Marles
The crisis was triggered by the Iran conflict and the blockade of the Strait of Hormuz. Roughly 20% of the world's oil passes through the strait.
Prices and enforcement
Unleaded petrol is now averaging $2.19 nationally, with prices reaching $2.25 per litre in some areas. Diesel is $2.65. Prices have risen approximately 50% since the conflict began.
The Australian Competition and Consumer Commission has been ordered to monitor for price gouging. The government has doubled fines available for petrol company misconduct.
ACCC officials are meeting with fuel retailers on Wednesday. The outcome of those discussions has not been disclosed.
Household impact
The average Australian household is now $75 per week worse off when combining fuel price increases with the recent interest rate hike.
DiDi has increased its fuel surcharge to 5 cents per kilometre for passengers. Uber is monitoring the situation.
Victorian Farmers Federation president Brett Hosking warned supermarket shelves could begin emptying if fuel supply is not secured.
Third crisis this decade
Albanese described the situation as the third major economic crisis to hit Australia this decade, following the Ukraine War and COVID-19.
The government has relaxed fuel standards to allow higher-sulphur products into the domestic market.
How Australia got here
Australia's fuel vulnerability has been a known policy issue for years. The country maintains fuel reserves well below the 90-day minimum recommended by the International Energy Agency. Current stockpiles sit at roughly 36 days for petrol and 34 days for diesel.
The closure of local refineries over the past two decades left Australia dependent on imports. When global supply chains function normally, this poses no immediate problem. When a major shipping route closes, the exposure becomes apparent.
The Strait of Hormuz handles roughly 20% of global oil trade. Iran has threatened to set fire to any vessel attempting to use the route since hostilities began. No ship has attempted the passage in the past week.
The regional dimension
Regional communities are bearing the worst of the shortage. Service stations in remote areas operate on thin margins and limited storage. When panic buying drains their tanks, they cannot be replenished as quickly as metropolitan counterparts.
Agricultural operations face particular pressure. Diesel is essential for tractors, harvesters, and transport. Without reliable supply, crops cannot be planted or moved to market.
The Victorian Farmers Federation warning about supermarket shelves is not alarmist. If diesel remains constrained for another week, the logistics chain that moves food from farm to store will begin to fail.
What happens next
Thursday's national cabinet meeting will focus on coordination between federal and state governments. Emergency management protocols are being reviewed. The release of additional reserves remains an option.
The fundamental issue, however, lies beyond domestic policy. Until the Iran conflict resolves or alternative shipping routes prove viable, Australia will remain exposed to the same pressures that created this crisis.
For households, the immediate advice is straightforward: avoid panic buying, top up when genuinely needed, and expect prices to remain elevated for the foreseeable future.
SOURCES & CITATIONS
FREQUENTLY ASKED QUESTIONS
