Fuel prices set to soar in Australia

The price of petrol and diesel fuel in Australia is expected to increase and could reach “record-breaking” highs in the coming weeks, as escalating conflict in the Middle East pushes oil prices higher and exposes Australia to fuel supply issues.

Benchmark crude oil prices have already increased by around 20 per cent since the start of January according to Compare the Market, and Aussie motorists could soon face record-breaking petrol prices as conflict in the Middle East continues.

The comparison site said the current average price of petrol (Unleaded 91) is $1.98/litre in Sydney, $2.08/litre in Melbourne, and $2.02/litre in Brisbane, however, ‘extreme circumstances’ could significantly inflate those figures.

“In an extreme event, a 30 per cent increase in fuel prices from where they are currently could push the price of Unleaded 91 past $2.50 a litre in some regions. In that scenario, it would cost $125 to fill up a 50-litre tank,” said Compare the Market spokesperson Chris Ford.

“The last time we saw such high prices was in April 2024, where the national average for Unleaded 91 soared past $2.18 per litre and the city-wide average exceeding $2.30 a litre in some cities,” said Ford.

But diesel is predicted to be hit even harder, with Australian Trucking Association spokesperson Cam Dumesny telling the ABC that although Australia’s onshore fuel reserve should last 90 days, the reality is that we have much less.

“Whenever we’ve had situations in the Middle East, we’ve had a surge in fuel prices and that ultimately translates to higher costs for all consumers, particularly in regional areas,” said Dumesny.

“We don’t have the onshore diesel capacity, particularly… we know that if we have a conflict in the [Middle East] region, it’s going to translate to a skyrocketing price, particularly for diesel.

“There’s not a lot we can do about it because we don’t have the reserves on shore.”

Supply could also take a hit if the Strait of Hormuz – a major shipping route – is closed for an extended period.

The stark warning comes amid mounting cost of living pressures, which have already forced Aussie motorists to cut corners and postpone important vehicle maintenance (or DIY it).

In December, a survey by Compare the Market found almost 40 per cent of motorists had already adjusted their habits to save fuel, with many simply choosing to spend less time on road.

The comparison site offered tips on how to save, saying motorists should ‘vote with their wallet’ rather than remain loyal to one service station, utilise fuel deals often available through major supermarkets or roadside assistance programs, and get into the habit of checking fuel comparison apps to find the cheapest fuel in their area.

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