Treasurer Jim Chalmers has drawn a line in the sand with petrol retailers, warning them not to exploit international tensions as cover for unjustified price rises. On 3 March, Chalmers wrote directly to the Australian Competition and Consumer Commission's acting chair, Mick Keogh, signalling that the government understands that there will be movements in the market, but retailers cannot be taking people for mugs.
His intervention came as deadly conflict between the United States, Israel, and Iran has spilled into major oil-producing nations across the Persian Gulf, while disrupted shipments through the Strait of Hormuz are rocking the global energy market. Within days, pump prices sitting well above two dollars per litre in recent days showed even small differences between servos adding up fast.
Three days after Chalmers' letter, the ACCC's CEO Sarah Proudfoot fired back with demands of her own. The ACCC does not expect to see "uncharacteristic and abnormal" wholesale and retail price increases that don't accurately reflect movements in international fuel prices. The regulator set a deadline of 11 March for major fuel companies to explain their local pricing approach, including how quickly international price movements feed through to the bowser.
The government has backed this enforcement push with stronger penalties. The federal government is moving to increase maximum penalties for breaches of Australian Consumer Law and the Competition and Consumer Act by fuel companies, with the cap rising from $50 million to $100 million. This is not theoretical posturing. In February 2026, the Federal Court ordered Mobil Oil Australia to pay $16 million for making false or misleading representations about fuel sold at nine petrol stations in Queensland, after an ACCC investigation found the company had deceived consumers about additives in its fuel for close to four years.
Yet beneath the regulatory crackdown lies a deeper vulnerability. Australia currently has 34 days of diesel, 32 days of jet fuel and 36 days of petrol available. While the government notes these stocks represent the highest in 15 years, they still sit below international benchmarks. Australia's fuel security buffer remains dangerously thin and for years fell short of the 90 day minimum stockholding obligation set by the International Energy Agency.
The crunch extends beyond urban petrol stations. Dairy farmers report they have just days of diesel left and are unable to secure new bulk supplies from diesel wholesalers, with one 70-year-old farmer north of Brisbane saying his local independent diesel supplier told him she was unable to help despite his farm having just four to five days' worth of fuel.
The government has rejected calls to cut fuel excise, which currently stands at 51.6 cents per litre. Chalmers ruled out any decrease in fuel excise in a press conference on 4 March, stating that fuel excise is not something the government has been considering and that they have other cost of living help rolling out with two more income tax cuts on the way.
Reasonable people disagree on the right approach. Some argue that cutting excise would provide immediate relief to households already stretched thin. Others contend that excise cuts are temporary, expensive measures that distract from the real problem: Australia's underlying reliance on imported fuel at a time of global volatility. As an importer of liquid fuel, Australia has the ACCC monitoring exploitative retail behaviour, and the ACCC can intervene to prevent price gouging and unconscionable practices, but it has no power over the market and cannot insulate consumers against normal market increases.
The Chalmers warning signals that the government will use the regulatory tools available to it. Whether those tools are sufficient to protect motorists from the intersection of global conflict, thin reserves, and market volatility remains an open question.