Deputy Prime Minister Richard Marles said the government released 760 million litres of fuel into the system over the weekend, even as rural and regional areas face what Energy Minister Chris Bowen described as "real and unacceptable shortages" of fuel. The government's message is clear: Australians should maintain normal buying patterns, not hoard.
Yet the government's response reveals the limits of reassurance in a crisis. The fuel will take time to move through Australia's long and complex supply chain from where it is held to the regional areas where it is needed. Fuel company Ampol Australia committed to prioritise the redirected supply for regions of shortage and for the wholesale spot market that supports independent distributors and harvesters, but this commitment depends on execution.
The fuel crisis traces directly to global conflict. Iran has effectively closed the Strait of Hormuz, a critical passageway that carries 20 per cent of the world's oil supply. Australia currently has 36 days of petrol supply, 29 days of jet fuel, and 32 days of diesel left in the tank, well below the international standard of 90 days and leaving the country vulnerable to extended disruptions.
Energy Minister Chris Bowen has provided assurances Australia has enough fuel and said shortages were down to people stockpiling. Demand surges have been severe. Bowen revealed demand increased by 100 per cent in Mildura and a staggering 280 per cent in Adelaide Hills and Barossa. The gaps are real, though behavioural factors have amplified them.
The government has taken a second major step beyond releasing reserves. Climate Change and Energy Minister Chris Bowen announced the government will temporarily lower fuel quality standards for 60 days to allow higher-sulphur fuel to be sold, which will add roughly 100 million litres to the market each month. The temporary relaxing of standards drops sulphur levels to 50 parts per million, significantly lower than that allowed by most other OECD nations.
This trade-off illustrates a core tension in the government's response: immediate supply gains now versus environmental standards later. Between late February and mid-March, average petrol prices shot up nearly 50 cents a litre across Australia's five largest capital cities, placing pressure on farmers and independent service stations hardest hit by supply disruption.
Independent operators, particularly in rural areas, face genuine constraints. Regional and independent stations said they were finding it harder to access fuel after Ampol, BP, Mobil and Viva Energy prioritised regular customers and cut off smaller groups buying on the spot market. This creates a secondary tier of scarcity beyond mere shortages, where smaller competitors cannot access supply regardless of how many billions of litres the government releases.
Marles' call for unchanged behaviour assumes rational actors with complete information. But research suggests panic buying is driven less by selfishness and more by how people perceive risk and decide what feels reasonable during uncertainty. When petrol prices rise visibly and service stations close, rational self-protection and panic become difficult to separate.
Whether the government's approach succeeds depends on factors beyond its control: how long the Middle East conflict persists, whether supply chains adapt fast enough, and whether fuel companies deliver on commitments to prioritise regions. The deputy prime minister has staked the government's case on citizens maintaining normal behaviour while the system catches up. That is reasonable advice. But it remains advice issued from a position of structural vulnerability, and it will only hold if the promised fuel arrives where it is needed.