Fuel supplies in regional parts of Australia are tightening as disruptions in global oil shipments affect deliveries. Service stations in the Western Australian towns of Kulin and Corrigin have introduced temporary fuel restrictions due to uncertain deliveries and increased demand.
Shipping has been disrupted through the Strait of Hormuz, a major oil transport corridor, following the escalation of conflict in the Middle East. The situation is affecting agricultural operations as farmers prepare to harvest summer crops and plant winter crops.
National Farmers' Federation president Hamish McIntyre said farmers depend on imported inputs and global markets.
"The conflict in the Middle East reiterates how Australian farmers are at the mercy of geopolitical tensions because of their heavy reliance on imported inputs and export markets," he said.
"Without fuel and fertiliser, farmers simply can't get food and fibre to consumers."
If fuel and fertiliser constraints continue, he warned that costs for perishable goods such as dairy, fruit and vegetables could increase by 40 to 50 per cent.
"It's a double effect - it's the cost of delivery, plus the cost to farmers that will add up to a greater cost for consumers in our supermarkets."
Government officials and industry representatives have discussed the situation. Energy Minister Chris Bowen, Agriculture Minister Julie Collins, and Industry Minister Tim Ayres met with representatives from the National Farmers Federation, oil companies, and the trucking sector.
Bowen confirmed that Australia had around 32 days of diesel supply available.
"We have enough diesel in Australia for our needs for the foreseeable future, and there is absolutely no need for panic," he said.
He said refineries were meeting contracted deliveries but were unable to meet additional orders due to increased demand.
Motorists have increased fuel purchases, leading to higher petrol prices. Average prices for unleaded petrol have moved above US$1.32 per litre (A$2 per litre) in every capital city except Perth.
Economists at National Australia Bank (NAB) said rising oil prices could affect inflation and consumer prices. Crude oil prices have increased to more than US$84 per barrel (about US$118 per barrel in Australian dollar terms).
NAB said headline CPI could peak about 0.5 percentage points higher than previous projections, reaching about 4.75 per cent in the second quarter. A sustained rise in oil prices toward US$100 per barrel could push inflation above 5 per cent.
Treasurer Jim Chalmers said the Australian economy should prepare for volatility linked to global developments.
Pressure on fuel supplies may also affect agricultural supply chains. Farmers rely on diesel to power tractors, irrigation pumps, and machinery used for crop harvesting and production.
"Animals will start dying, crops are going to suffer," Transwest Fuels co-owner Sam Clifton said.
He added that one farmer had reported having only 1000 litres of fuel remaining.
Sources: 9 News, Otago Daily Times
