Price hike: The days of hanging out for a $1.20 Wednesday refuel are over. Now the new low is $1.59.
Photo by
Rodney Braithwaite
The great Australian fuel hike has been inflamed by the unfolding Russia-Ukraine conflict.
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The standard price of fuel has more than doubled since the start of the COVID-19 pandemic, caused by oil refineries incorrectly estimating global demand, surging consumption and now active warfare.
Global oil prices have surged to prices not seen since 2014-15 and they surged even higher when news broke of the Russian military attack on February 24.
Russia is the world’s largest exporter of natural gas and the third largest producer of crude oil, 72 per cent of which goes to Europe and 26 per cent to Asia.
Small land, big trouble: The Donbas region, highlighted in grey, runs along the Ukrainian border with Russia. It contains one of the largest coal reserves in Ukraine and is a major heavy industry area, producing steel, rail carts, military vehicles and white goods. About 22 per cent of Donbas’ production is normally exported to Russia.
Photo by
Daneka Hill
Fears over Russia cutting off the fuel supply lines has created an artificial ‘energy crunch’ as Europe scrambles for other options.
Prime Minister Scott Morrison said the Australian fuel price increase was being caused by “fluctuations in oil prices” and people shouldn’t “go and completely recalibrate” their budgets just yet.
"The advice we are getting, particularly out of the International Energy Agency, is that this impact is likely to be short-term, it's likely to be temporary," Mr Morrison said on February 24.
These comments were made hours before Russia authorised the military attack on Ukraine.
The Russia-Ukraine conflict has been on the simmer since 2014 when pro-Russian separatists took control of the Donbas region, which is a coal basin and major steel producing area.
The Donbas area has a long history of wanting independence and around 75 per cent of the population speak Russian, not Ukrainian.
Since 2014 the Donbas region has been controlled by pro-Russian separatists (the self-declared Donetsk and Luhansk People's Republics) and the Russian military has been hovering on the borders ever since to passively protect the separatists from large-scale action by Ukraine.
Russia has publicly justified its current military action as a matter of sovereign safety and necessary to protect the Donetsk and Luhansk People’s Republics.
Australia relies on Malaysia and Pacific nations such as New Zealand and Papua New Guinea for the majority of its oil supply.
With military action now actively happening in the Donbas region, expect fuel prices to remain high.
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