Regional service stations are struggling to replenish fuel supplies left empty due to panic buying that has seen demand double and even triple in areas such as the Barossa and Mildura amid an escalating conflict in the Middle East.
As a major motoring group warned of a “vicious cycle” of motorists hoarding petrol, Chris Bowen, the energy minister, stood up in parliament to urge Australians to remain calm, insisting the nation had no fuel shortage.
Amid reports that the country’s gas stations are running dry, some regional fuel distributors have claimed the shortage is due to wholesale gasoline being reserved for sale in big cities.
“The biggest risk to availability in Australia right now is panic buying,” Bowen said, pointing to a “massive increase” in demand that had seen fuel sales rise 238% in Adelaide Hills and the Barossa, and 100% in Victoria’s Mildura.
“Of course, suppliers are also struggling to meet demand.”
Referring to reports that farmers were struggling to get diesel, he said: “I can say this very clearly: the difficulties you are currently experiencing are not due to the lack of fuel coming into our country, nor the lack of fuel coming into our country.
“We have received supplies in recent days. We are closely monitoring the industry on what ships are en route to Australia, and those ships continue to arrive.”
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Bowen’s comments came after Queensland regional fuel distributor Bartranz Petroleum said on Tuesday it had been receiving only about 10% of its usual allocated fuel volume from Brisbane.
“It’s frustrating to hear government ministers say ‘there is no shortage,'” Bartranz wrote on social media. “Whether it’s a supply or distribution issue, the result for rural Australia is exactly the same – we can’t access fuel.”
With gasoline prices rising by as much as 25 cents per liter in major cities since the start of the US-Israel war against Iran, there have been widespread reports of people hoarding fuel for fear it will become even more expensive or run out.
Peter Khoury, a spokesman for car group NRMA, which last week accused petrol retailers of raising prices, said panic buying was now putting pressure on supply, creating a vicious cycle that only made the situation worse.
“As Australians, we can help by avoiding panic buying,” he said. “But we’re also saying to the oil companies: let’s make sure the supply chains are working… starting at the terminal.”
On Tuesday afternoon, the government held an emergency meeting of a quickly formed task force bringing together agriculture, transport and fuel bodies along with four federal ministers.
The group committed to working together to share information and identify emerging issues, and at its first meeting acknowledged that while there had been some supply chain pressures in regional areas, the country’s fuel supply remained stable.
Peter Jones, acting chief executive of the Motor Trades Association of Australia, said some regional and rural service stations simply could not replenish their stock quickly enough to meet the surge in demand.
“There is a lot of gasoline in the country, but it is designed to be distributed under normal circumstances,” said Jones, who is also president of the Victorian Automotive Chamber of Commerce.
Jones said panic buying had “actually changed the dynamics of the market,” which was amplified in the country because of the time it took to get fuel there, creating a dire situation for farmers who relied on diesel.
“It’s a tyranny of distance,” he said. “The other thing is … some of the independent (gas stations) are running out because if they don’t have a contract with one of the big oil companies, they can end up at the bottom of the list when it comes to refueling.”
Jones said independent gas stations that had “agreements” with big oil companies to supply them with fuel, rather than formal contracts requiring a certain volume, may not be able to request a refill as they normally would.
He urged people to buy fuel as they normally would and to be respectful of service station staff, amid reports that some customers are abusive or aggressive “when there is no fuel or prices are much higher than they expected”.
Jones said a sharp drop in the price of crude oil overnight was promising, but trying to predict how long the conflict would last – and whether prices would rise again – was like “trying to put darts on a moving target”.
The growing community friction over fuel availability and price comes as a CBA analyst said the US-Israel war against Iran would last months, not weeks.
The global oil benchmark, Brent crude, was trading at just over $70 in late February but rose as high as $118 earlier this week before Donald Trump signaled a possible end to the war by saying that US military objectives were “virtually complete”.
The price of Brent crude oil fell significantly following the US president’s comments.
Oil sold for just under $93 a barrel on Tuesday afternoon, according to Bloomberg, up about 30% from March.
Madison Cartwright, senior geoeconomics analyst at CBA, predicted that the conflict “will continue to escalate from here, despite recent comments” from Trump.
That means Australians may need to get used to fuel prices well above $2 a litre, pushing the average household’s weekly fuel bill towards an all-time high of $75, according to AMP chief economist Shane Oliver.
