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Speaker 1: Already and this this is the Daily This is the

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Speaker 1: Daily OS.

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Speaker 2: Oh, now it makes sense. Good morning and welcome to

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Speaker 2: the Daily OS. It's Tuesday, the seventeenth of March. I'm

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Speaker 2: Emma Gillespie, I'm Billy fit Simon's. Today we are unpacking

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Speaker 2: a pretty simple question with a complicated answer. Could Australia

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Speaker 2: run out of petrol? The short answer is not tomorrow,

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Speaker 2: but the longer answer involves a thirty three kilometer strip

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Speaker 2: of water in the Middle East, a war that's now

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Speaker 2: in its third week, and a fuel crisis that's already

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Speaker 2: hitting regional Australian's heart.

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Speaker 1: And before we get into today's podcast, we have a

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Speaker 1: quick favor to ask the audience.

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Speaker 2: That's right, We're running a little survey at the moment

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Speaker 2: because we want to hear from you. If you are

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Speaker 2: a regular listener to the podcast, if you have thoughts

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Speaker 2: and feelings to share, we want to hear them. There's

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Speaker 2: just a few questions and will only take you a

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Speaker 2: few minutes.

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Speaker 1: We will put the link to that in today's show notes.

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Speaker 1: But now back to the deep dive. So em like

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Speaker 1: you said, we are now in the third week of

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Speaker 1: this war between the US Israel and Iran. I think

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Speaker 1: before we get to the petrol prices, we should zoom

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Speaker 1: out a little bit. What is the latest with what's

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Speaker 1: happening in the Middle East.

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Speaker 2: Well, to zoom out a little bit, we need to

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Speaker 2: take it back to the twenty eighth of February. Now,

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Speaker 2: that is when the US and Israel launched strikes on

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Speaker 2: Iran in a joint military operation that killed the regimes

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Speaker 2: supreme leader and hit military and naval infrastructure across Iran.

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Speaker 2: Iran responded with retaliatory strikes targeting Israel and US military

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Speaker 2: bases right across the Middle East. So this conflict has

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Speaker 2: since spread across the region, across the Gulf countries, and

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Speaker 2: the conflict, as you mentioned, it's now in its third week.

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Speaker 2: There is no clear end insight, and things have escalated

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Speaker 2: into other countries as I mentioned, like southern Lebanon. We've

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Speaker 2: seen the UAE involved and other surrounding countries in that region.

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Speaker 1: And I know we have briefly explained this on the

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Speaker 1: podcast before, but just to remind everyone, what does that

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Speaker 1: have to do with petrol prices.

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Speaker 2: Well, as it turns out, everything really and this all

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Speaker 2: has to do with the Strait of Home moves now,

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Speaker 2: that is a shipping lane off Iran's southern border. It

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Speaker 2: accounts for roughly twenty to twenty five percent of the

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Speaker 2: world's oil and liquefied natural gas. So that's how much

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Speaker 2: moves through that strait every day or every day until

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Speaker 2: this conflict broke out. Before this conflict, oil was sitting

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Speaker 2: at around sixty seven US dollars a barrel. Then Iran

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Speaker 2: closed the strait to oil tankers, and the price has

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Speaker 2: surged to around one hundred and five dollars a barrel.

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Speaker 2: That's a forty percent increase in just a few weeks now.

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Speaker 2: Average petrol prices as a result, have already shot up

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Speaker 2: nearly fifty cents a leter across Australia's largest capital cities,

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Speaker 2: and if prices reach one hundred and fifty dollars a barrel,

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Speaker 2: some analysts are warning here in Australia we could be

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Speaker 2: paying about three dollars fifty a liter at the pump.

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Speaker 2: And Billy listeners will have noticed the petrol prices at

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Speaker 2: their local servos absolutely surging.

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Speaker 1: And one thing that I've seen a lot online is

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Speaker 1: that I mean, you and I are living in a

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Speaker 1: metropolitan area, but I hear it is particularly bad in

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Speaker 1: regional Australia where there is not as much supply.

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Speaker 2: Yeah, this has been a big focus of the government

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Speaker 2: in the last few days. We heard from the Energy

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Speaker 2: Minister Chris Bowen. He has publicly said that rural and

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Speaker 2: regional areas are facing what he called real and unacceptable shortages.

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Speaker 2: We heard from one company based in Queensland, trans West Fuels.

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Speaker 2: They serve us about five hundred businesses and this week

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Speaker 2: said we have no access to any fuel from tomorrow. Zero,

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Speaker 2: None out of Brisbane, none out of Newcastle. Now that

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Speaker 2: has immediate consequences not just for us at the pump,

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Speaker 2: but for farmers, for transport operators, service stations that rely

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Speaker 2: on independent distributors. As a result of that, there are

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Speaker 2: now also these massive concerns about food security. If food

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Speaker 2: from farms in regional and remote parts of the country

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Speaker 2: cannot be transported to supermarkets everywhere else in the country,

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Speaker 2: what does that mean for the prices that we're paying

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Speaker 2: at the supermarket checkout.

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Speaker 1: Yes, that has been what I hadn't immediately put together

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Speaker 1: that regional Australia, they of course need petrol and oil

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Speaker 1: not just to drive their car, but literally to keep

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Speaker 1: things running on their farm and then in order to

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Speaker 1: get it to the metropolitan areas.

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Speaker 2: Absolutely, and if you live in a really regional or

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Speaker 2: remote part of the country, you might need half a

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Speaker 2: tank of petrol just to get to the nearest township.

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Speaker 2: So often people that live in those parts of the

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Speaker 2: country are buying a lot more, spending a lot more

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Speaker 2: on fuel, and it is literally a lifeline.

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Speaker 1: And actually on that I also saw people talking about

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Speaker 1: having trouble getting to the hospital because they didn't know

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Speaker 1: if they had enough petrol. So the consequence are huge.

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Speaker 2: Yeah, it's much more far reaching than just Oh, I'm

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Speaker 2: annoyed that I have to fork out more EPISOVO.

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Speaker 1: Okay, we are going to keep talking about the issues

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Speaker 1: in rural and regional Australia. But first, here is a

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Speaker 1: quick message from today's sponsor. And I said before that

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Speaker 1: it was supply issues with regional areas, but as I

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Speaker 1: said it, I realized that I actually didn't fully know

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Speaker 1: if that weren's accurate. Yeah, is that true? Why is

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Speaker 1: it that regional Australia is so much more impacted than

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Speaker 1: the metropolitan areas.

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Speaker 2: Yeah, we were on the money, Billy. I think we

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Speaker 2: need to understand that as a whole, for Australia, less

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Speaker 2: than twenty percent of our liquid fuel demand actually comes

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Speaker 2: from domestic refineries domestic production, so we are really heavily

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Speaker 2: reliant on imports, you know, in the best case scenario.

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Speaker 2: But then cities are kind of served as a priority

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Speaker 2: or served by major fuel companies with more supply security,

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Speaker 2: while regional areas tend to rely more on independent supply,

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Speaker 2: so they have a less secure supply chain when it

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Speaker 2: comes to distributors. I thought that this quote summed it

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Speaker 2: up well from doctor Lurian Demelo from Macquarie University's Business School,

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Speaker 2: who this week said, we do not lack access to

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Speaker 2: oil in Australia, we lack secure access to ships willing

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Speaker 2: to be able to deliver refined fuel. So that speaks

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Speaker 2: to the fact that eighty percent of what we need

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Speaker 2: comes from overseas, and when there are limits on overseas supplies,

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Speaker 2: we feel it here quickly, and we feel it worst

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Speaker 2: in regional areas.

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Speaker 1: And so that's the issue in terms of a solution.

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Speaker 1: What is the government doing about it?

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Speaker 2: So there are a few things happening that I wanted

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Speaker 2: to take you through at the federal level, the Energy Minister,

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Speaker 2: Chris Bowen, has announced a temporary lowering of fuel quality

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Speaker 2: standards for sixty days. Now that sounds technical, but let

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Speaker 2: me explain what it actually means. Australia has this requirement

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Speaker 2: where fuel has to meet a certain standard for sulfur content. So,

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Speaker 2: for example, E ten pet which is the cheapest unleaded

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Speaker 2: petrel that will have a higher sulfur content than unleaded

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Speaker 2: ninety five, unleaded ninety eight more premium fuels. In December

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Speaker 2: last year we introduced new sulfur standards which meant that

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Speaker 2: the quality of our petrel actually had to be of

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Speaker 2: better quality with lower sulfur. But when you relax these

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Speaker 2: sulfur standards temporarily, it means that fuel that would otherwise

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Speaker 2: be exported overseas, maybe for blending, can instead be redirected

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Speaker 2: into the Australian market.

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Speaker 1: Can I ask a dumb question?

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Speaker 2: There are no silly questions.

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Speaker 1: What is sulfar and is it so load for cars? Is?

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Speaker 2: Well, it's not as bad for cars as it might sound.

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Speaker 2: I think this is the important question. In the short term.

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Speaker 2: Putting higher sulfur content petrol into your car is not

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Speaker 2: really going to be of any concern because as I mentioned,

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Speaker 2: Australia only recently upgraded its fuel standards. We're effectively talking

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Speaker 2: about just taking a temporary step back from those world

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Speaker 2: class standards. The main concern here though is environmental So

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Speaker 2: higher sulfur fuel produces more pollutants when it's burned, but

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Speaker 2: in terms of mechanical damage, it really would only occur

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Speaker 2: after long term exposure. So you would have to be

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Speaker 2: filling up your car month in, month out with this

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Speaker 2: less regulated or refined petrol type I guess, rather than

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Speaker 2: you know, a couple of tanks over sixty days, according

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Speaker 2: to the experts, is not going to permanently damage your engine.

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Speaker 1: Right, And so by them allowing petrol to have more sulfar,

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Speaker 1: how much fuel will that actually add to the market.

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Speaker 2: So the government expects that this will add around one

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Speaker 2: hundred million liters of petrol a month to the domestic supply.

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Speaker 2: Bowen has also released up to seven hundred and sixty

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Speaker 2: million liters of petrol and diesel from our emergency reserves,

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Speaker 2: and fuel company Ampole has said that it's committed to

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Speaker 2: prioritizing regional areas experiencing shortages. So there are a few

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Speaker 2: moving parts that are focused on easing this supply burden

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Speaker 2: and also easing conditions in the regions.

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Speaker 1: So you said that those new rules for solfar had

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Speaker 1: been introduced for sixty days. It sounds like a bit

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Speaker 1: of a short term solution. And I guess the hard

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Speaker 1: thing here is that no one knows how long this

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Speaker 1: conflict will go for. So what happens if it goes

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Speaker 1: for longer than those sixty days.

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Speaker 2: It's the million dollar question, I guess, Philly. And before

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Speaker 2: these additional measures to ease that burden on supply were announced,

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Speaker 2: Australia had about four or five weeks of petrol supply.

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Speaker 2: Now that's across unlettered diesel aviation fuel as well. But

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Speaker 2: then the question becomes, okay, will the government restrict how

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Speaker 2: much fuel we can buy? You mentioned hospitals earlier. You

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Speaker 2: know there are questions about should there be prioritization of

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Speaker 2: who gets the fuel supply? Do we need to make

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Speaker 2: sure that first responders have a guaranteed supply for now?

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Speaker 2: Chris Bowen has ruled that out. He said rationing's not

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Speaker 2: going to happen, or in his exact words, that is

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Speaker 2: not what we're contemplating. That is not predicted. That being said, though,

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Speaker 2: there are some regional servos that have already taken matters

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Speaker 2: into their own hands. We saw a couple in remote

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Speaker 2: wa last week who introduced their own purchasing limits, one

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Speaker 2: in New South Wales that enforced a twenty dollars limit

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Speaker 2: per customer to stretch supply.

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Speaker 1: A twenty dollars limit per customer.

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Speaker 2: Yeah, which is when I think it becomes even more

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Speaker 2: important that this is happening in the regions because twenty

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Speaker 2: dollars might not get you very far.

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Speaker 1: That's not going to get you far at all, exactly.

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Speaker 2: And a couple of Victorian stations actually ran out over

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Speaker 2: the weekend again in the regions, but they received resupplies yesterday,

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Speaker 2: so a temporary kind of headache there. But as you

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Speaker 2: can see, business owners are kind of making their own

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Speaker 2: minds up about what restrictions to impose.

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Speaker 1: And I guess one thing to mention with the restrictions

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Speaker 1: is that we have seen that some people are not

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Speaker 1: just filling up their car, they're also getting what do

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Speaker 1: you call it, like a little tank on, like a

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Speaker 1: jerry can, yes, yeah, yeah, yes, exactly, a jerry can,

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Speaker 1: and they're filling that up and taking it home with

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Speaker 1: them after also filling up their car. So that's why

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Speaker 1: some petrol stations are running out even faster.

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Speaker 2: Yes, and you speak to a really important problem there, Billy,

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Speaker 2: which is panic buying and this impact on petrol inflation

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Speaker 2: that's caused by panic buying. At the federal level, Bowen

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Speaker 2: has been really clear that it's not necessary. He's trying

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Speaker 2: to dissuade people from panic buying and said that this

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Speaker 2: is the sort of fundamental issue driving regional shortages. Bowen said, quote,

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Speaker 2: the biggest risk to fuel availability in Australia right now

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Speaker 2: is panic buying. But some independent distributors have pushed back.

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Speaker 2: They're saying the problem is structural, that major oil companies

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Speaker 2: have been withdrawing from regional supply chains for the last

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Speaker 2: several years and that's kind of created this perfect storm.

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Speaker 2: The opposition leader Angus Taylor has also pressed the government,

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Speaker 2: saying Labour's quote mismanagement of fuel security and the economy

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Speaker 2: is driving up inflation and hitting Australian's cost of living hard.

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Speaker 1: Okay, so that's kind of the federal level of things.

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Speaker 2: Yep.

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Speaker 1: I heard that yesterday. I believe the New South Wales

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Speaker 1: government held crisis talks over what to do with petrol.

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Speaker 1: What happened there.

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Speaker 2: Yeah, there's this urgent round table that was held in

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Speaker 2: New South Wales yesterday as you mentioned, and that brought

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Speaker 2: together experts from a diverse range of industries and fields

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Speaker 2: across transport, logistics, fuel companies, agriculture, local councils, mining unions,

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Speaker 2: consumer groups. So the New Southales government is really trying

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Speaker 2: to get ahead of these potential shortages or these reports

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Speaker 2: of shortages. It wants to increase compliance checks through New

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Speaker 2: South Wales's Fair Trading so focusing there on retailers and

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Speaker 2: whether or not they are doing the right thing and

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Speaker 2: charging a fair amount. And New South Wales also wants

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Speaker 2: to expand price monitoring through its fuel check program. So

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Speaker 2: a big conversation in New South Wales centered around inflation

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Speaker 2: and panic buying, i'd say more so than global supply

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Speaker 2: chain issues.

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Speaker 1: Okay, So where does all of this leave us, Because,

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Speaker 1: like we said, we don't know how long this conflict

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Speaker 1: will go on for in the Middle East.

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Speaker 2: And it all really depends on that. If you look

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Speaker 2: to the White House and the Trump administration, they're saying

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Speaker 2: that the war could end within a few weeks. However,

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Speaker 2: I would caution anyone with the language that we hear there.

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Speaker 2: Within a few weeks is the kind of phrase that

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Speaker 2: we often hear out of the US when it comes

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Speaker 2: to conflict, and a few weeks can sometimes mean a

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Speaker 2: couple of days, it can sometimes mean a couple of years.

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Speaker 2: So Trump is planning to announce a coalition to escort

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Speaker 2: ships through the Strait of Hall moves. So he's calling

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Speaker 2: on countries that rely on fuel coming out of the

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Speaker 2: Gulf to pitch in and to help sort of escort

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Speaker 2: these boats safely through that important shipping lane back home.

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Speaker 2: The federal government says it's not rationing, it's actively resisting

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Speaker 2: going there. It also says it won't send its naval

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Speaker 2: ships to the Strait, But some experts say if the

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Speaker 2: straight stays closed for several more weeks, there may be

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Speaker 2: no choice but to talk about rationing.

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Speaker 1: Wow, what's the message to drive is right now? Is

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Speaker 1: it to drive less?

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Speaker 2: Well? I think for most Australians it remains don't panic by,

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Speaker 2: because if we all agree not to panic by, then

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Speaker 2: prices will come down to a more realistic level. But

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Speaker 2: you know that takes a village to put it lightly.

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Speaker 2: The message from Bowen is fill up when you normally would,

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Speaker 2: don't stockpile, take what you usually need so that no

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Speaker 2: one has to go without. Interestingly, the consumer watchdog, the

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Speaker 2: a Triple C is also actively monitoring this. It said

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Speaker 2: that they're ready to hold wholesalers and distributors to account

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Speaker 2: for breaches quote, and will not hesitate to ask for

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Speaker 2: the highest penalties appropriate under the law. So hoping there

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Speaker 2: that maybe retailers who might be doing the wrong thing

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Speaker 2: will be spooked into doing the right thing. And just finally, Billy,

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Speaker 2: I wanted to talk about some interesting data that dropped

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Speaker 2: yesterday from the Australian Automobile Association. This shows that there

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Speaker 2: were record high sales of electric vehicles and hybrid vehicles

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Speaker 2: in the last quarter of twenty twenty five. I saw

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Speaker 2: this yes So now around one in five new cars

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Speaker 2: purchased in Australia is an EV or hybrid EV. I

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Speaker 2: think that it will be really interesting to see if

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Speaker 2: this current situation and crisis around fuel and cost will

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Speaker 2: increase that market and will drive more consumers to consider

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Speaker 2: electric vehicles because of course they're not having this problem.

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Speaker 1: Yeah, I thought that data was so interesting, particularly because

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Speaker 1: the data period was before this war. So even before

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Speaker 1: this war, there were a record number of sales for

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Speaker 1: electric vehicles in Australia and a record low number of

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Speaker 1: sales for petrol cars. And so, like you said, now

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Speaker 1: the fact that this has happened potentially will lead to

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Speaker 1: an even higher record. You can only presume that it was.

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Speaker 2: Yeah, and we don't know yet. You know, not to

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Speaker 2: not to make correlations that don't exist. But if I

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Speaker 2: was about to buy a new car and I was

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Speaker 2: paying you know, two dollars fifty to three dollars a

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Speaker 2: leter for petrol, I would be looking at my options.

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Speaker 2: Put it that way.

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Speaker 1: Yes, Wow, it is almost a jump scare hearing the

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Speaker 1: term panic by again because it is literally six years

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Speaker 1: this week that COVID all of the lockdown started happening

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Speaker 1: in Australia. Everyone I know and everyone was panic buying

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Speaker 1: toilet paper.

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Speaker 2: Where did the last six years go?

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Speaker 1: I know, it's crazy that it's been six years, but yeah,

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Speaker 1: that was when I feel like that was the first

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Speaker 1: time I really heard of panic buying.

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Speaker 2: Yep.

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Speaker 1: And you just are starting to hear it more and more.

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Speaker 1: Not to scare anyone, but you know the fact that

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Speaker 1: that term is coming up again.

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Speaker 2: Yeah, it's that kind of hive mind where people start

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Speaker 2: to worry and they see, all, if everybody else is

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Speaker 2: doing it, why shouldn't I do it? But similarly, if

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Speaker 2: everyone doesn't do it, then it gets so much better.

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Speaker 1: Yes, and thank you for taking us through that. Thanks Billy,

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Speaker 1: and thank you so much for listening to this episode

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Speaker 1: of The Daily oz Like we said at the start,

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Speaker 1: we are running a quick survey for this podcast where

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Speaker 1: we want to hear from you. We want to hear

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Speaker 1: what you like about the podcast, what you think we

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Speaker 1: could improve on. The link to that is in today's

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Speaker 1: show notes. Otherwise, we will be back later today with

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Speaker 1: the afternoon headlines, but until then, we hope you have

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Speaker 1: a good day. My name is Lily Maddon and I'm

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Speaker 1: a proud Arunda Bunjelung Calgudin woman from Gadighl Country. The

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Speaker 1: Daily oz acknowledges that this podcast is recorded on the

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Speaker 1: lands of the Gadighl people and pays respect to all

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Speaker 1: Aboriginal and torrest Rate island and nations. We pay our

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Speaker 1: respects to the first peoples of these countries, both past

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Speaker 1: and present,