Thirty Six Days of Petrol, a War in the Gulf and an Industry That Saw This Coming

Four weeks ago the average Australian motorist was paying about $1.70 a litre for unleaded. This morning the national average is sitting at $2.55, diesel has smashed through the $3 mark in every single state and territory, and the word "rationing" is being workshopped inside National Cabinet. That is not a price cycle. That is not seasonal fluctuation. That is a genuine supply shock, and it exposes something this country has been warned about for the better part of two decades.

Let me walk you through what is actually happening, why the numbers look the way they do, and what it means for you at the bowser over the coming weeks.

The Numbers Right Now

Before we get into the geopolitics, here is where things stand as of this morning across roughly 10,000 stations we track nationwide.

Read that diesel column again. The national average is above three dollars. That is not a metro premium or a one off remote markup. That is the average across more than 4,200 stations. In NSW the average diesel price is 313.3 cents. In South Australia it is 312. Tasmania 311.6. Every state is now above 300 cents per litre for diesel.

And the trajectory tells a story all by itself. On 12 March, the national unleaded average was 222 cents. Diesel was 254. In fourteen days unleaded has climbed 33 cents and diesel has climbed 56. That is a 15 percent rise in petrol and a 22 percent rise in diesel in two weeks. Over the full month the numbers are even more confronting: diesel is up 66.5 percent since late February. Unleaded is up 43.5 percent.

The gap between the cheapest and most expensive suburbs selling diesel in Victoria right now is 130 cents a litre. Broadmeadows has stations at 189.9 cents. Other servos in the same city are charging 319.9. That is not a market functioning properly.

How We Got Here

The immediate trigger is the US and Israeli military operation against Iran that began on 28 February. Iran's response included mining and blockading sections of the Strait of Hormuz, the narrow waterway between Iran and Oman through which roughly 20 percent of the world's oil supply passes on any given day. Before the conflict, around 20 million barrels a day moved through that strait. That flow has been reduced to almost nothing.

Brent crude jumped from about US$71 a barrel in late February to US$94 within ten days. It has since pushed past US$110. The US Energy Information Administration expects it to stay above US$95 through April and May before easing below US$80 in the third quarter, assuming some form of de escalation. That is the optimistic scenario.

For Australia, a country that imports more than 90 percent of its refined fuel, this is not an abstract geopolitical problem. It is an immediate, tangible supply constraint. Energy Minister Chris Bowen confirmed on 21 March that six oil shipments bound for Australia in April have been turned back or deferred. Wholesalers are reportedly rationing petrol and diesel, and transport companies have been cut off from bulk supplies in some regions. Over a hundred stations have run dry in regional NSW alone.

The 36 Day Problem

Here is the part of this story that should keep people up at night. As of the latest government figures, Australia holds approximately 36 days of petrol supply, 30 days of diesel and 29 days of jet fuel. Those numbers sound like they provide a buffer. They do not, for three reasons.

First, the International Energy Agency requires member nations to hold 90 days of net import cover. Australia is the only IEA member that does not meet this requirement and has not since 2012. We committed to building a strategic reserve. We never built one.

What we did instead was introduce a Minimum Stockholding Obligation in 2023, which requires importers and refiners to maintain baseline stocks: 24 to 27 days of petrol and jet fuel, and 20 to 32 days of diesel depending on whether you are a refiner or importer. That sounds like a strategic reserve until you realise those stocks are not sitting in government controlled bunkers waiting for a crisis. They are the working inventory inside the commercial supply chain. They are the fuel that is already in pipelines, in transit, in terminal tanks waiting to be dispatched. Depleting them means running down the buffer that keeps the system flowing day to day.

Second, those 36 days assume normal consumption. Panic buying, which has already started in some areas, compresses that timeline dramatically. The NRMA reports queues at servos in western Sydney. Social media is doing the rest. When people see stations running dry in Dubbo or Tamworth, they fill up whether they need to or not, and that self fulfilling prophecy burns through supply faster than any shipping disruption.

Third, the reserves are not distributed evenly. Regional and remote Australia is at the end of every supply chain, and those communities are the first to be cut off when wholesalers start rationing. Tennant Creek in the Northern Territory currently has a 94 cent spread on unleaded. Kununurra in Western Australia has a 120 cent diesel spread. Alice Springs diesel ranges from 280 to 335 cents. These are not competitive price variations. These are communities being told to take whatever price is on offer or drive without.

The Dirty Fuel Decision

On 12 March, the federal government did something that would have been unthinkable three months ago. It temporarily rolled back Australia's fuel quality standards, allowing petrol to contain up to 50 parts per million of sulfur instead of the 10 ppm standard that came into effect on 15 December 2025.

Let me put that in perspective. Australia spent twenty years getting to Euro 6 equivalent fuel standards. We were the last developed nation to do it. The low sulfur standard was a public health achievement that reduced particulate emissions, improved catalytic converter performance and aligned us with every other comparable economy on the planet. We held it for exactly 87 days before suspending it.

The government says the measure will release an additional 100 million litres of fuel per month. That sounds substantial until you do the maths: Australia consumes roughly 50 million litres of fuel a day. So the relaxation buys us about two extra days of supply per month. The temporary standard runs until 31 May, with a transitional period allowing up to 40 ppm sulfur through August, and a return to 10 ppm from 1 September.

The backlash has been significant. Environmental groups, public health advocates and automotive engineers have all pointed out that higher sulfur fuel damages catalytic converters and diesel particulate filters, produces more harmful exhaust emissions and essentially undoes months of air quality improvements. The government's counterargument is straightforward: dirty fuel in people's tanks is better than no fuel at all. It is hard to disagree with that logic even if the underlying situation that forced the choice is damning.

The ACCC Steps In

The ACCC has launched what it is calling its most significant fuel investigation in a decade. The targets are the four major fuel retailers: Ampol, BP, Mobil and Viva Energy. The focus is alleged anticompetitive conduct in diesel supply to independent wholesalers and distributors in regional and rural Australia.

This follows a pattern. In February, Mobil was ordered to pay $16 million for misleading representations about fuel sold at nine stations in north Queensland. The government is now doubling maximum penalties for consumer law breaches by fuel companies, taking the cap from $50 million to $100 million.

The ACCC has also commenced weekly fuel market updates, replacing the quarterly monitoring cycle that was clearly too slow for a market moving this fast. ACCC Chair Gina Cass Gottlieb has called on retailers to explain the extent of their price increases, noting that wholesale prices do not fully account for what is being charged at the bowser.

That last point is important. When crude goes up 50 percent but bowser prices go up 66 percent for diesel, the gap has to come from somewhere. Terminal gate prices, refinery margins, transport costs and retail margins all contribute, but the question the ACCC is now asking publicly is whether some of those components are being inflated under the cover of a crisis.

The Excise Question Nobody Wants to Answer

The current fuel excise sits at 52.7 cents per litre. On a $2.55 litre of unleaded, that is roughly 21 percent going straight to the Commonwealth. On diesel at $3.08, it is about 17 percent. There are credible voices on both sides of the excise debate.

The case for cutting it is simple: immediate hip pocket relief when families are hurting. Peter Dutton has pitched halving excise for twelve months. Five federal independents have demanded it. The precedent exists: the Morrison government halved excise in 2022 during the Ukraine crisis.

The case against is equally straightforward. The fuel excise raises roughly $12 billion a year. Halving it costs about $3 billion every six months. That money funds roads and transport infrastructure. And there is a legitimate concern that in a supply constrained market, cutting the tax simply allows margins to expand rather than delivering savings to motorists. When supply is the binding constraint, making fuel cheaper does not make more of it appear.

The Albanese government has ruled out a cut. It has instead focused on supply side interventions: releasing diesel reserves, relaxing fuel standards and pressuring retailers through the ACCC. Whether that approach holds depends entirely on how long the Hormuz disruption persists and whether prices continue climbing toward the psychologically devastating $3 per litre mark for unleaded.

What the State by State Data Tells Us

Our data shows a fascinating divergence across the country that reveals how differently supply chains hit each state.

Victoria and the ACT are cheapest on average, but the spread in Victoria is enormous. The cheapest unleaded in the country right now is actually in the Northern Territory at 153.9 cents, but the average is the highest in the nation at 271. That is a market where one or two stations are still selling old stock while the rest of the territory has repriced aggressively.

South Australia has the tightest spread between cheapest and average. The floor there is 246.7 cents, meaning there are essentially no cheap options left. The cycle has lifted every station.

Western Australia, which usually benefits from proximity to the Indian Ocean supply routes, is running higher than usual. That proximity to the Middle East shipping lanes, normally an advantage, has become a liability when those lanes are compromised.

What Happens Next

The honest answer is nobody knows. There are three broad scenarios.

Scenario one: De escalation by mid April. This is the EIA's base case. Military operations wind down, the strait reopens gradually, crude falls back below $80 by Q3. In this scenario, Australian bowser prices would start easing in May, with diesel likely lagging petrol by several weeks due to tighter global inventories. You would still be paying $2 plus for unleaded through winter, but the worst would be behind us.

Scenario two: Prolonged disruption through Q2. The strait remains partially blocked. Crude stays above $95. The government extends the dirty fuel exemption and potentially releases more reserves. Rationing becomes a real possibility in regional areas. Diesel stays above $3 nationally. Transport and logistics costs flow through to food, construction and manufacturing. The cost of living crisis that was already hurting Australians gets materially worse.

Scenario three: Escalation. Further military action disrupts additional supply routes or damages Gulf state production infrastructure. Crude pushes past $130. Formal rationing. Unleaded approaches or exceeds $3 nationally. This scenario would trigger economic recession and is the one being war gamed inside National Cabinet.

What You Can Actually Do

The standard advice about shopping around and timing your fill ups still applies, but it matters more now than it ever has. Our data shows spreads of 50 to 130 cents per litre in the same suburb. That is $25 to $65 difference on a 50 litre tank.

• Check prices before you drive. The days of pulling into whatever servo is closest are over when diesel is three dollars. A five minute check on current prices near you can save a meaningful amount.
• Consider E10 if your vehicle supports it. The national average for E10 is 248.6 cents against 255.2 for ULP. That 6.6 cent gap adds up to $3.30 per tank and compounds over time.
• Do not panic buy. Filling up when you do not need to is exactly what creates the shortages that lead to more panic buying. Keep to your normal fill up pattern.
• Watch the weekly ACCC updates. The new weekly monitoring reports provide the best publicly available data on whether retail margins are expanding beyond what wholesale prices justify.
• Check national price trends. Understanding whether prices are still climbing or starting to plateau helps you decide whether to fill up now or wait.

The Bigger Picture

This crisis was foreseeable. Not the specific trigger; nobody predicted the timing of the Iran conflict. But the vulnerability itself has been documented for years. Australia's decision to close its refineries, its failure to build a genuine strategic reserve, its dependence on extended maritime supply chains through geopolitically fragile waterways. These were all flagged by energy security experts, by the IEA, by parliamentary inquiries.

The Minimum Stockholding Obligation was a compromise when what was needed was a commitment. The clean fuel standards that took twenty years to achieve were suspended in under three months. The competitive dynamics that the ACCC is now investigating did not appear overnight.

What we are living through is the consequence of treating fuel security as a cost to be minimised rather than insurance to be maintained. The premium on that insurance looks very different when you are standing in a queue watching the price board tick upward and wondering whether the servo down the road has any diesel left at all.

I will keep watching this closely. The data changes daily and the policy responses are evolving in real time. This is the most consequential moment for Australian fuel policy since the oil shocks of the 1970s, and how we respond to it will shape energy security debates for the next decade.

The price data cited in this article is sourced from Petrolmate's real time monitoring of over 10,000 Australian service stations. All figures are current as of 26 March 2026.