Albanese warns of Iran war ‘tail’ as fuel reserves reach 46 days

Australia faces a “long economic tail” from the war in the Middle East despite fuel reserves being higher than they were before the conflict, Anthony Albanese has revealed. The Prime Minister met with state and territory leaders on Thursday for national cabinet, the first since Iran, Israel, and the United States’ ceasefire came into effect. Speaking to the media, Mr Albanese said Australia’s supply outlook “remains secure in the near term”, though the government was working to prepare contingences in the event of further disruptions to fuel and fertiliser. The Prime Minister thanked Australians for “voluntary” changes in behaviour which, he said, had contributed to petrol reserves growing to 46 days. Reserves are now about 51 per cent of the International Energy Agency minimum of 90 days, but are higher than the 36 days held when the war broke out on February 28. However, Mr Albanese said that even if the conflict ended immediately and the Strait of Hormuz was fully reopened, Australia would still face a “time lag” before the economic consequences of two months of conflict “flow through the system”. “It takes time to clear the strait to make it safe,” Mr Albanese said. “It will take time for the ships that have been stuck in the Gulf to reach their destination, to unload and then to travel back to receive more supply. “So, there will be a long economic tail here.” Currently, six cargo ships are en route to Australia carrying more than 300,000 litres of diesel. Mr Albanese said the federal government would “do what we can” to determine if future cargoes might become available for purchase on the spot market. The Prime Minister also touted the government‘s diversification of its fuel supply. The United States, not traditionally a big fuel supplier, is supplying about 18 per cent of imports, Mr Albanese said. Argentina, “very small indeed”, is now “into double figures”, he added. Algeria, in North Africa, was also supplying fuel to Australia. Energy Minister Chris Bowen said Australia still faced “international headwinds” and risks and uncertainty in the medium term. “Nothing is being left on the field when it comes to ensuring that Australia is very well placed,” he said. ‘Some good news finally for motorists’ Prices continue to tick down heading into the Anzac Day weekend. Speaking in Sydney on Thursday, NRMA spokesman Peter Khoury said wholesale spot market fuel prices were coming down, as were prices at the pump. “Wholesale prices have been falling steadily now for a few weeks,” Mr Khoury said. “Diesel has fallen a dollar a litre, the wholesale price and in the last three weeks and unleaded has fallen by 70 cents a litre so we are now starting to see those prices flow onto the bowser. “It is very clear that we’re in a better position than we were a couple of weeks ago and that should continue into the long weekend although looking at what is going on over the Middle East who knows how long that will last.” NRMA analysis of petrol station prices showed “the majority” of retailers were in the lower 50 per cent of prices, and half of Sydney servos had unleaded for less than $1.90. “We’re seeing some positive news for Australians as we’re getting ready for the Anzac Day long weekend,” Mr Khoury said. “We are seeing a good spread of prices compared to where we were a couple of weeks ago. “Obviously, we are way off where we were before this conflict began, but at least prices for the last couple of weeks have been heading in the right direction.” Mr Khoury also urged motorists to shop around on fuel price apps. Near-miss on $3.90/L diesel Modelling on April 9 showed diesel prices in Australia should have hit $3.90 a litre, analysis by Primera research shows. “The only thing that stopped it was fuel retailers quietly destroying their own profit margins, collapsing to just 1.7 per cent (normal is 9.8 per cent) to keep prices from going through the roof,” Primera managing director Robert Beerworth said. The federal government slashing fuel excise temporarily staved off astronomical prices, as did the three-month pause on 32 cents-per-litre heavy vehicle road user charges. “On July 1, a temporary federal excise cut expires. That’s an overnight price jump of around 32 cents a litre … Diesel moves every truck and every delivery in the country. When its price goes up, so does everything on the shelf,” Mr Beerworth said, adding the threat of $3.90-per-litre diesel had not evaporated. “The $3.90 moment passed. But the costs that prevented it didn’t disappear; they were deferred. Margin recovery is bringing them back slowly. The July excise cliff brings them back all at once,” he continued. Retailer profit margins are increasing again. “The absorbed costs are finding their way back to the pump,” he said.