The situation
If you have been feeling the pinch at the pump lately, it’s not just in your head. Fuel costs in Australia have climbed to their highest levels since early April. In Canberra, we’re seeing diesel hit 298.7c per litre and unleaded at 250c. Across the country, prices have jumped roughly 40c a litre this month, which is lowkey adding about $22 to every 55-litre fill-up.
Why is this happening?
It’s giving global chaos. International refineries are struggling to get oil because conflict in the Middle East has messed with tanker routes through the Strait of Hormuz and the Bab al-Mandab chokepoint. To make matters worse, Ukrainian strikes have restricted Russian supply. With Brent crude sitting above US$100 a barrel, costs are naturally cascading down to us.
The Trump factor
The plot thickens because the Trump administration is considering banning U.S. diesel exports to keep American gas prices down ahead of the midterms. Since the war started, the U.S. has been a major player, exporting over 1.5 million barrels a day. Analysts at MST Financial are warning that if this ban happens, Australia could be looking at rationing and prices soaring past $4 a litre. While Macquarie University’s Dr. Lurion De Mello thinks prices might cap closer to $3.10, he noted that if the U.S. pulls out, we’ll be fighting Europe for shipments from Asian refiners.
Why it matters
Australia is almost entirely dependent on diesel imports, and our stockpiles have dipped from 39 days' worth in July to 31 days now. If prices blow past $3, industries like farming, mining, and transport are going to be hit hard. Real talk: this isn't just about your car. The Reserve Bank is expected to hike interest rates to 4.6% on Tuesday, and these fuel costs are a huge reason why. Stay tuned—the vibes are definitely not great for the cost of living right now.
