US and Israeli attacks on Iran triggered retaliatory strikes on major oil facilities, and Iran has effectively closed the Strait of Hormuz, a critical passageway that carries 20 per cent of the world's oil supply. The shockwaves are reaching Australian motorists with force.
Late this week, a national fuel emergency response manual obtained by former independent senator Rex Patrick revealed what the government had hoped to keep confidential. The manual suggests a daily transaction limit which could be set by the federal energy minister, with the $40 cap equating to around 16 litres at current petrol prices. The document was developed in 2019, laying out what authorities might do if the Governor-General declared a national liquid fuel emergency.
The plan's escalation is methodical, moving from voluntary carpooling measures to directed fuel allocation, before reaching consumption limits. Other measures the government could take include directing fuel to be delivered to areas of shortage or essential users, ordering petrol companies to maintain minimum stocks, transferring fuel between states and territories and directing refineries to produce quantities of petrol or diesel.
Yet senior government figures moved quickly to distance themselves from rationing proposals. Trade Minister Don Farrell told reporters in Canberra: "The government has no intention of applying caps to the consumption of petrol". According to the Sydney Morning Herald, Environment Minister Murray Watt dismissed the $40 figure as merely a hypothetical example from seven years ago.
The real crisis is unfolding at service station pumps. Petrol prices have jumped 50 cents a litre across Australia since the start of the US-Iran war. Australia currently holds 36 days of petrol supply, 29 days of jet fuel, and 32 days of diesel. The aviation sector is already buckling. As reported by 7News, Jetstar has reduced its New Zealand services by 12 per cent, with multiple flights between Auckland and both Sydney and Brisbane cancelled due to surging fuel costs.
The government's immediate response has been market-based rather than interventionist. 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 obligations for diesel will reduce from 2.7 billion litres to 2.2 billion litres, and for petrol from 1 billion litres to 700 million litres, allowing the release of up to 762 million litres from domestic reserves.
The deeper problem is structural. Australia's fuel import profile demonstrates significant exposure to Middle Eastern supply disruptions, with approximately 40 per cent of petroleum products sourced from the region. For a nation dependent on imported fuel, controlling its response depends partly on factors beyond Canberra's reach. The International Energy Agency announced it would release a record 400 million barrels from emergency stockpiles, moves that should provide some relief.
The revelation of the 2019 contingency plan, however modest its current application, raises uncomfortable questions about the state of Australia's fuel resilience. Some experts are calling for a national fuel emergency plan that identifies priority sectors, including agriculture, that would receive fuel allocations if imports slowed or stopped. That such a plan exists but was kept from public view suggests authorities recognised the gravity of fuel dependency long before crisis struck.
For now, the government is insisting market mechanisms and strategic releases will suffice. Whether they prove adequate depends on events far from Perth or Canberra. The Strait remains closed, oil markets volatile, and hundreds of Australian service stations continue to run dry.