Food price shock warning as fuel fears spark farm alarm
Australians are being warned that every corner of the economy will be affected by rising fuel prices as a result of the war in Iran.
But consumers are being urged to avoid panic buying, which has worsened supply problems and led to spending curbs at some service stations.
The average price of unleaded gasoline and diesel exceeded $2 per liter in all major cities, leading to accusations of profiteering by fuel companies.
The consumer watchdog has warned retailers about offering false or misleading reasons for cost increases.
NRMA spokesman Peter Khoury said the increase in diesel prices, some as high as 230 cents per liter in capital cities, would be detrimental to agriculture, mining and transport.
“We will see prices rising in every corner of the economy,” he told AAP.
“If these new record prices are sustained, this will directly impact the amount we pay in the supermarket aisle and will unfortunately have a serious inflationary impact on the economy.”
Increasing conflicts in the Middle East have closed the Strait of Hormuz, one of the world’s most important oil corridors, disrupting global shipping and restricting supply.
The motoring organization said diesel supplies were running low in some parts of Australia due to stockpiling and panic buying.
“We must return to our normal fuel buying habits and oil companies must ensure that independent retailers in the Australian region have access to the fuel they need when tankers arrive at our terminals,” Mr Khoury said.
Farmers warn that the fuel situation could affect food supplies due to difficulties in supplying diesel and fertilizer.
“Rising diesel and fertilizer costs are increasing the cost of food production, and these higher costs will be reflected in grocery prices for Australian households,” said Rural Aid chief executive John Warlters.
“Farmers are anxious about getting fertilizer in time for planting, and with fuel shortages already occurring, there is growing concern about maintaining essential farm operations.”
Energy Minister Chris Bowen said the service stations agency had told the government demand had increased by 280 per cent in some regional areas.
“Fundamentally, Australia’s fuel security is good because of the minimum stockpile obligations that we have put in place,” he told parliament on Tuesday.
“Petrol, diesel and jet fuel continue to be sourced from Australia as we expected in recent days and the industry expects this to continue for the foreseeable future.”
Opposition resources spokeswoman Susan McDonald said the fuel shortage was a disaster created by Labour.
“Our four big wholesalers are diverting fuel initially to retail pumps, cutting off farmers… people trying to grow food for this country, truck drivers trying to distribute it,” he told 4BC radio on Tuesday.
Qantas on Tuesday increased fares for its international flights due to rising fuel prices.
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