Fuel supply secure despite price alert as war grinds on

While prices remain volatile, Energy Minister Chris Bowen says Australia's fuel supply is secure. Photo: Susie Dodds/AAP PHOTOS The nation's fuel supply remains "solid and secure" but bowser prices will continue to rise as the war on Iran drags on and a temporary cut to fuel taxes winds up. The scaled-back extension of the fuel excise reduction of 16 cents per litre for petrol and diesel will apply until August 2. It is unlikely the discount will be extended. The fragile pause to hostilities between the US and Iran has unravelled as US President Donald Trump threatened a "massive attack" on Tehran, which he said had not "received enough pain". Australia currently has 42 days' worth of petrol, 38 days of diesel and 32 days of jet fuel. (Dean Lewins/AAP PHOTOS) Intensifying conflict had caused petrol prices in Australia to jump three cents overnight, with the average for unleaded $1.85, NRMA spokesman Peter Khoury said. Diesel had also jumped up to five cents, with the average cost $2.26. "We're seeing prices start to head north and wholesale prices have also gone up," he told AAP. "That's going up about 10 cents this week, so those increases are likely to flow on." Energy Minister Chris Bowen said on Saturday while the Middle East situation continued to be uncertain, "one thing Australians can be certain about is our fuel supply continues to be solid and secure". He said the nation had 42 days of petrol, 38 days of diesel and 32 days of jet fuel, totalling 6.2 billion litres of fuel, which was 15 per cent more than what was held when the US started bombing Iran in February. There are 51 ships en route to Australia and 3.1 billion litres of fuel locked in to be delivered in the next four weeks. NRMA's Peter Khoury says fuel prices will remain volatile while the Strait of Hormuz is closed. (Bianca De Marchi/AAP PHOTOS) Mr Khoury said the government had secured Australia's fuel supply but that would not impact the high prices motorists were likely to face. "Unfortunately, until the war ends in the Middle East and they have reopened the Strait of Hormuz, price is going to continue to be volatile," he said. With so much of Australian industry - including mining, agriculture and transport - run on diesel, the broader economic impact would be "extensive", Mr Khoury said. Australia sources most of its imported fuel from regional Asian markets, which prompted Prime Minister Anthony Albanese to travel to key partners such as Singapore earlier this year to shore up the nation's supply. But as shipping in the Strait of Hormuz remains disrupted, another choke point could emerge in the Red Sea after Iran-backed Houthi rebels claimed they struck two tankers in the key trading route. An escalation could pose a further threat to global energy supplies and price hikes. Mr Bowen said an International Energy Agency (IEA) report showed Australia was one of the few countries reporting lower wholesale energy costs, with a more than 30 per cent year-on-year reduction. The government's fuel excise reduction of 16 cents per litre for petrol and diesel ends on August 2. (Joel Carrett/AAP PHOTOS) "The IEA called out South Australia and Victoria for having particularly prevalent periods of negative energy prices, which of course is as a result of our very strong solar performance," Mr Bowen said. Experts have pointed to an alarming shortage of refined fuel such as petrol and diesel, which could sting the global economy. The government continued to review its policy settings to help manage hip pocket pain for motorists, Treasurer Jim Chalmers said. "We extended our cut to the fuel tax for another month to help take the sting out of petrol prices for Australian motorists and businesses," Dr Chalmers said. "This extra month of fuel tax discount is helping Australian motorists and businesses with the cost of living as this support tapers off."