Fuel crisis grips australia: prices surge, shortages reported

Sydney – Australians are facing a deepening fuel crisis as petrol and diesel prices hit record highs, with some service stations reporting critical shortages. The situation has prompted calls for government intervention, while economists warn of potential negative consequences.

Rising costs, growing concerns

Diesel prices have surged by an average of 10% in the past week across Australia’s five largest cities, reaching 303.5 cents per litre, according to the Australian Competition and Consumer Commission. Regular unleaded petrol is up 8% to 252.2 cents per litre. The escalating costs are putting immense strain on households and businesses already grappling with the cost of living.

The Prime Minister, Anthony Albanese, acknowledged the pressure families are under, attributing the crisis partly to the war in Ukraine and increased demand. However, he emphasized that Australia hasn't experienced a reduction in fuel supply, suggesting the issue is more about distribution, particularly in regional areas.

Shortages reported across nsw

New South Wales saw particularly acute shortages, with one in seven service stations temporarily out of stock of at least one fuel type. Fifty-nine stations were completely without fuel, and 207 were out of diesel or premium diesel. This represents an increase from the figures reported just days earlier.

Opposition leader Angus Taylor has called for an immediate halving of the federal fuel excise, a tax currently set at 52.6 cents per litre. Such a move would save motorists approximately 26 cents per litre, but economists caution that it could exacerbate shortages and fuel inflation.

“Cutting Australia’s fuel excise could make petrol shortages worse,” economists warned. Former opposition leader Peter Dutton had previously proposed a 12-month halving of the excise at the 2025 election, estimated to cost $6 billion.

Treasurer Jim Chalmers has resisted calls for a cut, citing budget considerations, while highlighting that the benefit of such a measure would disproportionately favor wealthier households. The government is instead focusing on a national response, drawing lessons from the COVID-19 pandemic, where inconsistent state-level responses were criticized.

While the government anticipates a shipment of six tankers of jet fuel from China arriving between March 28th and April 8th, and assured supplies of jet fuel until late April or early May, the immediate impact on petrol prices remains uncertain. Nationals leader Matt Canavan criticized the government’s handling of the situation, insisting that enough fuel should be available if the claims of sufficient supply are accurate.

The situation underscores a significant challenge for the Australian government: balancing immediate cost relief with long-term economic stability. The rising cost of fuel is not just a financial burden; it's a symptom of broader economic vulnerabilities that demand more than just temporary fixes.

The government is scheduled to convene a national cabinet meeting with state and territory leaders on Monday to discuss a coordinated response.

The average diesel price across the five largest cities reached 303.5 cents per litre, while regular unleaded petrol stood at 252.2 cents per litre.

Additional reporting by Penry Buckley.