Prices skyrocket but major fuel shortages "very unlikely"

In this episode of 'Follow The Money,' host Ebony Bennett explores the surge in petrol prices across Australia, linking it directly to the blockade of the Strait of Hormuz by Iran, which has disrupted around 20% of global oil and LNG flows. Despite the global energy crisis, Senior Economist Matt Grudnoff from the Australia Institute reassures listeners that Australia is not at risk of a fuel shortage due to its wealth and ability to pay higher global prices. He explains that price acts as a rationing mechanism—those who can't afford the higher costs drop out of the market, while supply remains stable due to continued imports and strategic stockpiles. Temporary shortages at petrol stations are attributed to hoarding, particularly by farmers and transport companies in regional areas, rather than actual supply failure. Grudnoff outlines potential future rationing measures, such as limiting purchase amounts per transaction, but emphasizes that even in worst-case scenarios, 80% of global oil would still be flowing. The episode also critiques Australia’s long-term dependence on fossil fuels, highlighting missed opportunities to invest in electric vehicles, public transport, and electrified heavy transport. The government’s recent fuel excise cut is analyzed as a costly, poorly targeted relief measure that disproportionately benefits higher-income earners. Finally, the discussion turns to the potential for taxing gas exports—a move Grudnoff argues would not threaten trade relationships given Australia’s status as a major energy exporter. Overall, the episode offers a clear-eyed, data-driven assessment that while prices are painful, fuel shortages are highly unlikely in Australia.