EDITORIAL: Wider plan on fuel crisis needed to limit damage
The Albanese Government must act before the fuel crisis turns into a full-blown economic crisis.
There is an old saying that money makes the world go round. Well yes. And no. Actually it is oil that makes the world go round.
And so Australia is entering a period of very great uncertainty. The war against Iran and its wild retaliation has effectively stopped about 20 per cent of the world’s oil supplies from going through the narrow Strait of Hormuz that connects the Persian Gulf with global markets. The crisis has us over a barrel.
It seems ridiculous that a conflict on the other side of the world that has lasted for just short of 14 days is threatening to throw our economy into chaos. Which raises questions about how we manage our fuel supplies.
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Amid stockpiling and outright panic buying, some petrol outlets have limited how much fuel can be bought.
Regional areas and famers are already warning they are running dry.
Without a solution this could be just the tip of the iceberg.
If growers can’t get fuel then the supermarket shelves will start to look bare of fruit and vegies.
It will cost truckies more to deliver the other everyday goods we need to the shops where we will end up paying more for them.
Already economists are warning that inflation is set to soar, with many tipping the Reserve Bank of Australia will respond by increasing interest rates again — possibly as soon as next week and then again in May.
The Albanese Government’s response has been piecemeal
Treasurer Jim Chalmers has described the economic consequences of the war as “substantial” and said Treasury was in the process of updating its inflation forecasts.
“We had an inflation challenge in our economy (before the war) and developments in the Middle East over the last couple of weeks will make that more challenging rather than less challenging,” Dr Chalmers said.
The Australian Competition and Consumer Commission has been given extra resources to monitor petrol price spikes amid threats of $100 million fines for price gouging.
On Thursday Energy Minister Chris Bowen maintained Australia’s fuel stocks were strong, with 36 days of petrol supply on hand, 29 days of jet fuel and 32 days of diesel.
But rural and regional Australia was experiencing shortages linked to a doubling of demand and supply chain constraints.
It came as the Government weighed up a request from the International Energy Agency to release Australia’s oil reserves, and Mr Bowen temporarily lowered fuel quality standards in a bid to get an extra 100 million litres a month more petrol into the market, particularly regional markets.
Fuel with higher sulfur levels, which would usually have been exported, will be allowed to be blended into domestic supplies for the next 60 days.
And yet the signs remain that we are at risk of seeing the fuel crisis turn into an economic crisis. To date the Government’s response has been piecemeal. It needs to get on the front foot with a wider plan to take us through this.
