Jim Chalmers declares the Government is ‘not expecting’ Australia to run out of fuel as US-Iran war rages on

Jim Chalmers has declared the Government doesn’t expect Australia to run out of petrol even if the war in the Middle East drags on, giving a guarantee that his ministerial colleagues have stopped short of providing.

The Treasurer said his department didn’t expect petrol prices to go past $3 a litre but cautioned the actual impact depended greatly on how long the war lasted.

As things stand now, it could push inflation up from the current 3.8 per cent to “mid-to-high fours”.

This would add further pain to Australians still struggling with the cost of living, especially if the Reserve Bank hikes interest rates on Tuesday as widely expected.

Prices have soared at bowsers across the country and many regional areas have reported fuel shortages in the fortnight since the US-Israel-Iran war began.

Energy Minister Chris Bowen has taken two steps to increase the supply of petrol across Australia — allowing dirtier fuel to be sold domestically instead of exported and releasing million of litres from reserves — while also insisting the continued arrival of ships with new supplies means shortages locally are being created by stronger demand not supply problems.

But he’s stopped short of providing guarantees that Australia won’t run out of fuel.

Dr Chalmers said on Sunday that the Government wasn’t expecting that scenario.

“We’ve got big stockpiles of fuel, whether it’s petrol or diesel or jet fuel, and we work around the clock to make sure that Australia doesn’t run out. We’re certainly not expecting that we will,” he told Sky News.

“We do understand and share the concern that motorists around Australia have, and that’s why we have turbo-charged the surveillance (of prices) and doubled the penalties and working with industry, it’s why we’ve released hundreds of millions of litres of fuel. It’s why we’ve temporarily relaxed the fuel standard to get more fuel into the Australian market.”

The Government isn’t considering cutting the 52.6 cents per litre excise on petrol and diesel.

“Obviously, at some point down the track, governments might choose to make different decisions about this, but it’s not something that’s on the list of things that we are working up for the budget,” Dr Chalmers said.

New Nationals leader Matt Canavan said he didn’t necessarily think cutting the fuel excise was the right way to provide relief to household because it had complicated knock-on effects for the trucking industry.

“They tell us, and I think this does seem to be true, there’s enough volume of fuel in Australia right now — but that’s a small mercy for those people, particularly farmers, people in business who rely on this, when they go to the petrol station or they call their contractor and there’s no fuel available,” he said.

“They’ve got a supply crisis. There may not be one across the entire country, but there has to be solutions for Texas in Queensland, for Deniliquin in New South Wales. All these places need petrol as well.

“What the government should be doing is getting a lot more information on where things are at and doing what they can to deliver things.”