Warning that diesel price rises will overtake 26c cut in a week as global fuel shipments slow

Prices in Perth will drop six cents on Wednesday, but it’s not a result of the 26-cent cut to fuel excise that is widely tipped to be quickly overtaken by price creep amid warnings that deliveries to Australia could stall from late April.

More price relief that was promised as a result of an agreement by the states to forgo extra GST is also in limbo, as leaders struggle to agree on a formula.

Premiers and Chief Ministers will meet again on Wednesday to continue negotiations.

The average price of unleaded will fall from $2.517 per litre on Tuesday to $2.446 on Wednesday, but motorists will pay up to $2.799 in Port Hedland.

The average for Brand Diesel is $3.214 per litre.

At 4PM on Tuesday there were 15 outlets that were out of ULP, and about 35 without diesel.

Premier Roger Cook’s deadline for fuel suppliers to be more forthcoming with commercial information about volumes and availability passed at 5PM Tuesday.

In Carnarvon to assess cyclone damage, he was yet to be briefed on the response after threatening to use emergency powers to compel the information otherwise.

But senior ministers met in Perth to consider more assistance for impacted industries, potentially including easing regulations to support grocery deliveries.

“There’s all of these key industries that are in charge of putting food on our tables,” Treasurer Rita Saffioti said.

“How can we support them at this time to reduce the inflationary impact?”

Federal Treasurer Jim Chalmers rejected concerns the Albanese Government’s excise cut will drive up inflation while barely easing pressure on motorists.

He warned it could take a week or two for motorists to benefit from the halving of the fuel tax even though it comes into effect on Wednesday.

“People shouldn’t rock up at five past midnight tonight and expect to see the full benefit passed on,” he said.

Dr Chalmers has asked the competition watchdog to set expectations for petrol retailers and keep an eye out for unjustified price increases.

The peak motorists’ body Australian Automobile Association was worried the fuel excise relief wouldn’t be passed on in full.

“But as much as the Australian public hates high fuel prices, it’s possible that motorists will hate government-enforced rationing even more,” managing director Michael Bradley said.

The Treasurer dismissed concerns the excise cut could further increase demand — saying Treasury estimated it could push it up by about 2 per cent — and inflation.

Prime Minister Anthony Albanese also tipped a bucket on economists living “in the academic world” arguing the excise cut would be inflationary and cause people to be hit with more interest rate rises down the track.

“The idea of some of this simplistic analysis that says that somehow this is putting more money into the economy — as your last caller said, because I was on the phone waiting, he’s still spending more money than he was before. So, how is there more money in the economy by reducing the cost?” he told ABC Melbourne.

Diesel prices across the country rose between 20 and 30 cents a litre over the week to Sunday, Bankwest Curtin Economics Centre head Alan Duncan said, and even with the excise cut there was little relief ahead.

“In some sense, it’s taking us back a week. So that’s essentially the scale of the the excise duty cut versus the progression of, in this case, diesel prices,” he told The West.

“That just tells you the challenge that we’re facing here, and how quickly those excise cuts are exhausted by the continued increase in prices.”

Concerns about the US following through on Donald Trump’s threats to “obliterate” Kharg Island, home to vital oil storage and export terminals, are pushing crude oil prices up even further which will cause more pain at the pump, Professor Duncan warned.

Prime Minister Anthony Albanese has insisted governments want to do everything they can to avoid mandatory rationing of fuel.

There are 81 shiploads of fuel scheduled to arrive in Australia during April, with 53 of those on their way now.

Energy Minister Chris Bowen told Parliament that Australia had secured shipments until the end of April and was working with international partners including Saudi Arabia to ensure further supplies.

Mr Albanese and Singapore’s Prime Minister Lawrence Wong last week issued a joint statement committing to continuing to supply each other with liquid fuel and gas.

But analysts from JP Morgan have warned if Iran continues to strangle the Strait of Hormuz the deliveries could dramatically slow from late April.

JP Morgan’s commodities research team said that a global shift from a flow shock to stocks starting to run dry was already becoming evident, and regional exporters in Asia were prioritising their domestic markets.

“March has been characterised by preventive measures and efforts to cushion price impacts, but April is likely to bring the first visible demand losses as supply constraints translate into reduced availability and declining inventories,” they wrote.

Dr Chalmers said the JP Morgan research pointed to “huge pressures on the supply chain” and that was why senior ministers and the PM had been chasing international counterparts to secure stocks for Australia.

“Of course, there’s a global scramble underway. We feel like we have equipped ourselves to do the best we can in securing some of that extra supply,” he said.

Mr Albanese told his Labor colleagues during Tuesday morning’s caucus meeting his focus was on “supply, supply, supply”.

“We want to avoid mandating; we’re a nation where we want to look after each other,” he said.

There was both uncertainty over the war and uncertainty about how it ends, which was causing people understandable anxiety compounded by the price rises, he told them.

Opposition Leader Angus Taylor made a similar point to Coalition MPs, saying that Australians were about to go into the Easter period with a fair bit of anxiety about what is happening in the economy and their access to fuel.

“This government hasn’t been up front about anything through this crisis,” he later told reporters.

“What are their plans? What kind of heavy-handed mandate are they working through?

“Everyone in the world wants to see lower fuel prices right now, and we know the pathway to do that is to open the Strait of Hormuz. I think we can over-complicate this. It’s pretty simple.”