WAR in the Middle East is having direct impacts on the prices of basic commodities in Australia, including petrol and other fuels that keep the local economy going.
Almost overnight, the geopolitical shape of the world instigated panic that filtered through global supply chains.
Unleaded petrol is now averaging over $2/litre in many areas of the state, hurting many locals already on tight incomes thanks to the cost-of-living crisis.
According to Fuel Radar, as of Wednesday, prices of Unleaded 91 in Port Macquarie ranged from 205.9 cents per litre (c/l) to 220.9 c/l.
Diesel ranged from 228.9 to 239.9 c/l, while Premium 98 ranged from 229.9 to 245.9 c/l.
Diesel, which powers Australia’s bulk transport trucks, has also spiked, with costs presumably to be passed on to households via rises in grocery store prices as supplies get more expensive to deliver.
Owners of electric vehicles are by no means immune, as the electricity that powers the grid, which recharges the vehicles, is heavily reliant upon the same diesel-powered supply system, not to mention the natural gas that is used to fire up power stations when demand surges.
The reason for the price hikes is that 20 percent of the world’s oil supply passes through the Strait of Hormuz, the narrow sea lane that connects the Persian Gulf and oil-exporters Saudi Arabia, Iraq, Kuwait, Qatar and UAE, to the rest of the world.
Hormuz is a natural choke point, measuring less than 40km at its narrowest point, between the southern coast of Iran and the northern tip of Oman.
The extended Iranian coastline means that even devoid of an active navy, Iran can attack the Strait at will, via drones and missile strikes, bringing global oil trade to its knees instantly.
The global air traffic hub of Dubai is only 100km away – leaving many Australian expatriates stranded as they attempt to fly home via that one key stopover, which is now in an active warzone.
According to Geoscience Australia, a Federal Government organisation, Australia is a net importer of oil, with only around 20 percent of the oil the country needs actually refined here last year.
By Thomas O’KEEFE
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