The $3.00-a-litre dilemma: why the Iran war could bring back fuel rationing |
The point where price is no longer a number on a bowser and becomes a warning sign was reached weeks ago by many. At $3.00 a litre, fuel isn't just expensive, it is a signal to fill jerry cans and prepare for when there is very little available.
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The Albanese government's decision to halve the fuel excise is a necessary reflex. Although the PM won't say it, the move aims to blunt the immediate pain, buy time, and hope global conditions stabilise. It has helped ease the price pain a little, but the longer Trump and Netanyahu's war goes on, the less high prices will be a primary concern. The most worrying development of an extended war will be fuel supply.
Australia is structurally exposed. Our nation imports the majority of our refined fuel. Any serious disruption, like stopping ships from passing through the Strait of Hormuz, hits us hard. We can't ride out prolonged shocks because we don't have deep fuel reserves.
Australia has improved its stockholdings in recent years, but it still operates with thin buffers, so in a fast-moving geopolitical crisis, weeks matter.
That's why the newly ratified National Fuel Security Plan is significant. Its four-tier escalation framework is an easily understood roadmap we can all adhere to. Right now, we sit at "keep Australia moving", a stage defined by voluntary restraint and gentle nudges. But the language hardens quickly as supply tightens: "targeted action", and then "protect critical services".
The Prime Minister hopes the final stage is never reached because that's where fuel rationing lives.
It wouldn't happen overnight; it would emerge as the logical next step after all the voluntary measures like requests to drive less fail.
We've been here before, so this is not some fantasy. During the 1979 oil shock triggered by the Iranian Revolution, New South Wales introduced odd and even number plate rationing. It wasn't perfect, but it worked. The difference in how rationing would work now was that then states acted independently.
That model may not hold today. A rationing scheme in 2026 would almost certainly be nationally coordinated, tightly enforced, and prioritise targeted allocation to essential services.
But there's a deeper question here, one that lies beyond logistics and legislation.
Would Australians comply?
COVID demonstrated both the strengths and limits of collective action. At the beginning, there was high trust, high compliance, and a shared sense of purpose. Over time, that frayed. Fatigue set in. The consensus fractured. Public health became politicised. The federal opposition is already politicising this situation. That's predictable, but as its members would know, Australia lacks reliable intelligence on U.S. intentions under Donald Trump, leaving our leaders unable to inform the public while trying to prevent national panic.
Fuel rationing would be a test, similar to COVID. It would be about how people live, work, and move every single day.
The government is already signalling the first step: "voluntary choices". Drive less. Combine trips. Consider alternatives. In theory, it's simple. In practice, it collides with reality, especially outside major cities in Tasmania, where public transport is limited.
Sustained behaviour change at a significant scale is hard, even under pressure.
If Australians can even modestly reduce demand, it buys time to avoid triggering the harsher stages of the National Fuel Security Plan. Fuel rationing is a contingency that the federal government has told us it is actively preparing for. Therefore, the real question isn't whether fuel rationing is possible. It's whether we can avoid needing it at all.
Craig Thomson is the editor of The Examiner.
Tributes & Funerals Notices
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Butler, Alan Brian2026
Butler , Alan Brian2026
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