‘Virtually every business in WA’: Industry leaders warn of flow on effect from fuel crisis as servos run dry

As WA service stations already run dry from the Iran war-induced fuel crisis, industry leaders have warned “virtually every business in WA” will be disrupted — anything from food and milk, to holidays, online shopping and construction. Delivery companies have begun hiking their fees, with Australia Post the latest doubling shipping charges due to sharply rising fuel costs. The fast rising fuel prices are also greatly impacting service industries, including health and support workers who spend their days making home visits to look after people outside of hospital. Several WA service stations have run dry of petrol while across the nation, almost 550 are experiencing a shortage of at least one type of fuel. The fuel crisis is prompting WA farmers to considering drastically reducing their cropping input this year, according to Pastoralists and Graziers Association of WA President Tony Seabrook. Qantas and Virgin have already increased the cost of airfares, while Jetstar and Air New Zealand have axed a number of services across the Tasman. Housing industry experts have also predicted extra fuel surcharges will add an extra $3000 to the cost of building a typical $450,000 house. Rising transport costs are already forcing many contractors across earthmoving, concreting and other trades to impose fuel levies on builders. While fixed contracts will absorb the costs, levies will be a practice expected to become standard for all new work. Shadow Energy Minister Dan Tehan said he was deeply concerned by reports Australian farmers were reconsidering sowing their crops which could have a significant impact on the national food supply. Mr Tehan said the Opposition were prepared to give bipartisan support where appropriate to help Australians get through the crisis. “This is becoming beyond serious for the Australian people. We have farmers coming to us saying they’re not going to be able to put the crops in,” he said. “We have dairy farmers saying, they’re not going to be able to afford to get the dairy produce where it needs to go in an affordable manner, to the Australian people.” Mr Seabrook said farmers were facing the double-whammy of fuel supply issues and access to fertilisers and petrochemicals which also come through the strife under siege Strait of Hormuz, the narrow waterway where the threat of Iranian attacks has kept most ships from getting through. “I think a number of farmers might be considering cutting back on their program,” Mr Seabrook said of the ramifications. “We’ll have enough fertiliser to sew a crop but what determines the profit or not is whether you can continue to fertilise with urea later in the season. “We need to work out what our breakeven point is. I don’t think we can make a profit out of it. I think it’s probably going to cost us more to sow that crop then we’ll get out of it if we aren’t able to get hold of your urea. “Some may not even have their first dose of fertiliser. No one has an answer.” National Farmers Federation President Hamish McIntyre said while there wasn’t a mandated fuel rationing in place, widespread self-imposed restrictions had begun across the sector to safeguard supplies. “We’re rationing it ourselves on our own and you know putting it to where we most need it,” he said. He also warned that if the war was prolonged and the fuel issue worsened that it would become “an animal welfare issue” for farms with livestock and a”social issue” for regional communities. WA Nationals Leader Shane Love asked the Government for an urgent briefing on what’s being done to prioritise fuel supplies to the Goldfields, Esperance and other parts of regional WA. “I’ve heard of one farmer, at least in my area, who’s decided to park their stuff in the shed, machinery in the shed, rather than face the uncertainty,” he said. He predicted surging transport costs will hit shop shelves in country WA within weeks. Transport Minister Catherine King and Workplace Relations Minister Amanda Rishworth announced amendments to the Fair Work Act on Tuesday allow transport operators to rapidly renegotiate contracts enables fairer distribution of fuel spikes across the supply chain. “Some of the largest supermarkets are already working with the trucking industry to renegotiate contracts, but this should be happening away,” Ms King said. “Currently the Fair Work Commission cannot deliver a determination for at least six months. But with operators having such tight margins, they cannot wait.” Energy Minister Chris Bowen also announced on Tuesday that Australia will impose temporary adjustments to diesel standards for the next six months, increasing supply and broadening import market options. “This six-month adjustment will lower what’s known as the flashpoint for diesel, from 61.5C, to 60.5C, increasing diesel supply options from refiners and international sources,” he said. It’s the latest in a suite of measures the government has taken to alleviate fuel pressures since the Middle East conflict started on February 28. That has included releasing up to 762 million litres of fuel from Australia’s strategic domestic reserves, relaxing Australian standards to allow higher sulfur levels, working with trading partners and appointing new fuel tsar Anthea Harris. Ms Harris held her first meeting as national fuel coordinator on Monday with representatives appointed by each State and Territory, as part of a push to coordinate Australia’s response to the crisis. Mr Bowen said he had also convened a meeting with State and Territory energy ministers and would continue to meet regularly if the disruptions prompted by the Iran war continue. Chamber of Commerce and Industry WA Chief executive Will Golsby warned “virtually every business in WA” would be impacted. “The impact of the conflict is being felt by virtually every business in WA. Fuel costs and the flow on impacts on supplier costs are staring to bite,” he said. “Businesses in freight and logistics are being hit particularly hard by fuel cost increases, as well as farmers right across the state. “We’ve also heard from businesses in health and disability care that providing home visits has become extremely expensive due to fuel price increases. “But really, there’s not many businesses that won’t be feeling the impact of this conflict, and smaller businesses will feel the pinch because they’re often operating on very thin margins. “It’s too early to tell what impact this will have in terms of business viability, but we do know that the longer this goes on, the harder it will be for many businesses.” He said there were some practical measures the government could take, including freezing fees and charges and considering changes to payroll tax. Prime Minister Anthony Albanese acknowledged the ripple effects the crisis would have on everyday Australians. “We live in a world which is more connected than ever before, where no one is immune from these shocks and we know that increased petrol prices put pressure on Australians,” he said in Parliament on Tuesday. “That’s why it’s so important to work with every partner that we can both at home and overseas to shield our nation as best as possible for the worst of global uncertainty.” Mr Bowen revealed the service station figures in Parliament on Monday — just hours after the Opposition had announced they would help create a register of fuel shortages, insisting that that the government hadn’t been transparent about the extent of the issue. Treasurer Jim Chalmers is also expected to introduce changes to the penalties the consumer watchdog can hand out, to give the ACCC stronger powers to deal with fuel retailer price gouging. It comes as Australia’s largest ammonia producer Yara Pilbara, located in Karratha, has been forced to halt operations for an estimated two months following a technical glitch caused by a power outage. WA Liberal Senator Matt O’Sullivan raised concerns about the shutdown in Federal Parliament on Monday, saying it highlighted Australia’s vulnerable energy network and warned it could have a significant impact on the local supply chain. A spokesman told The West Australian that the power outage had resulted in the shutdown of operation and further impacted on systems at the facility. “Repair work is required, and initial assessments indicate this could take around two months and curtail the production of ammonia and technical ammonium nitrate during this time,” he said. “Yara well understands the importance of its products to customers and will work to bring the operations back online as soon as practical.” WA Health Minister Meredith Hammat said the State Government was monitoring the wider situation closely to ensure vital transportation services like medicine, blood, and even ambulance services weren’t impacted. It comes amid concerns regional St Johns crews may be running short. “We’re monitoring the situation very closely. We’re working very closely with all of our suppliers to make sure that we’re identifying and addressing any issues that might arise,” she said.