In a move not dissimilar to panic buying toilet paper during the pandemic, car owners have beelined towards fuel stations (jerry cans in tow) in a bid to stockpile as much fuel as possible before the predicted surge.
But before you grab your car keys to join the queue, here’s what we know.
Operation Epic Fury
The US and Israel launched several missile strikes on Iran on Saturday, February 28 in a mission US President, Donald Trump, has called ‘Operation Epic Fury’ following failed attempts at nuclear negotiations. Iran’s supreme leader, Ayatollah Ali Khamenei, was killed after one of the strikes hit him at his compound at 9.45am.
Israeli Prime Minister, Benjamin Netanyahu, in a statement said, “This morning, in a powerful surprise strike, the compound of the tyrant Ali Khamenei was destroyed in the heart of Tehran.”
On Truth Social, Trump said, “Khamenei, one of the most evil people in history, is dead.”
The strikes have now been reciprocated, and have hit Dubai, Abu Dhabi, the United Arab Emirates, Bahrain, Saudi Arabia, Kuwait and Dona. Strikes have also been reported in Cyprus, Iraq and Jordan.
A disruption in global oil flows has now ensued after travel through the Strait of Hormuz has been halted. 20 percent of the world’s oil production moves through the strait.
A formal block has not been placed upon the strait, although Iranian Revolutionary Guard officials have threatened ships attempting the pass. Tanker traffic has been reported to have dropped by 70 percent.
A historical look at eye-watering fuel prices
Australia isn’t unused to seeing several shock rises in fuel prices, with two notable instances fresh in people’s minds.
In 2020, the Covid-19 pandemics saw a sudden decline in the cost of fuel due to lack of significant transportation, Brent’s (average world oil price) fell to AUD$25.57.
Prices jumped to AUD$142.04 in 2022 following Russia’s invasion of Ukraine.
Many may remember the record high of oil in 2008, during the Global Financial Crisis with Brent’s rising to a peak of AUD$208.81.
Current fuel prices
Motorists may have seen an initial jump in four cents following the strike with an expected rise of 10 percent within the week.
Oil prices have already increased by 20 percent since January. Compare the Market spokesperson, Chris Ford, said: “In an extreme event, a 30 percent increase in fuel prices from where they are currently could push the price of unleaded 91 past $2.50 a litre in some regions.”
For a 50-litre tank, it could cost motorists $125 to fill a single tank.
For regional towns surrounding the Nation’s Capital, motorists may already see an increase, although NRMA spokesperson, Peter Khoury, say this could be related to the upcoming Canberra Day, a territory-wide holiday.
What now?
It’s currently unknown how big of a jump fuel prices will make, although current predictions speculate a change less than the 2022 price hike.
Those running diesel vehicles may feel the pinch more after the benchmark price for diesel has risen from $22 per barrel to $115.
The average Australian uses 35 litres of fuel a week (although many of this readership may travel more due to isolated locations). It is expected to add roughly $14 a week to their fuel bill.
In Melbourne, demand was so high at a Costco station that their supply for 91 and 98 ran out overnight.
Real concerns lie in Australia’s current supply of fuel, with only 36 days of petrol and 34 days of diesel stored. Both of these should be closer to 90 days.
So… panic buy?
No, motorists should still pay for fuel at the lowest price that is available on the day they are looking for, but stockpiling fuel will only lead to further complications.
The current advice remains: stay calm and take it day by day. While panic was expected on Monday, 2 March, the stats aren’t reflecting anything drastic as of yet.
– Elizabeth Kovacs