Emergency measures intended to fix Australia’s fuel crisis are having the right effect.
The NSW Government’s fuel tracker shows prices have stabilised at about $2.25 per litre for regular unleaded, $2.49 for premium and $2.60 for diesel after dramatic rises from about $1.80 per litre two weeks ago.
The Albanese Government announced on Friday that it would allow dirtier fuel into Australia’s market as pressure builds on the nation’s fuel supply.
The emergency move came as regional Australia begins to feel a brutal squeeze, triggered by surging global prices and supply volatility from the escalating Middle East conflict.
There have been reports of local service stations running dry, while others are limiting sales and giving priority to emergency vehicles and essential users.
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In Batlow, NSW’s Snowy Mountains, locals were left without fuel after the town’s only petrol station displayed a handwritten sign reading “All fuel sold out” taped to the bowser.
In a bid to ease mounting pressures in rural parts of Australia, Energy Minister Chris Bowen announced the government would relax fuel quality standards for 60 days, allowing higher sulphur petrol to be redirected into the domestic market instead of being shipped overseas.
The move is expected to free up an extra 100 million litres of fuel a month for Australian motorists.
“In order to assist with getting more supply, and secure downward pressure on prices, I am temporarily amending Australia’s fuel quality standards to allow higher sulphur levels for the next 60 days,” Mr Bowen said.
“This will allow around 100 million litres a month of new petrol supply to be redirected into Australian domestic supply.”
Under the deal, Ampol has agreed to prioritise the extra fuel for regions facing the biggest shortages.
The government says farmers, fishers and regional drivers will be first in line for the redirected supply.
While the exact sulphur content of the fuel has not been disclosed, the move marks a notable backflip from recent efforts to tighten fuel standards in the country.
Since December 2025, the sulphur content of petrol sold at Australian service stations has been capped at 10 parts per million. Diesel has met that benchmark since 2009, while some premium unleaded fuels were previously allowed to contain more.
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Last week, Mr Bowen insisted Australia’s fuel reserves remain stable, arguing the current pressure is being driven by a spike in demand rather than a collapse in supply.
“Australian fuel stocks remain secure,” he said.
“What we are seeing is pressure on distribution chains caused by elevated demand.”
Despite images of empty bowsers and reports of rationing in some regional towns, Bowen has rejected suggestions Australia is in the grip of a full-blown fuel crisis.
The Energy Minister insisted Australia’s fuel reserves remain stable, arguing the current pressure is being driven by a spike in demand rather than a collapse in supply.
“I can say that our diesel and petrol supplies remain at this point secure,” Mr Bowen told reporters at Parliament House.
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“My key message is that every single expected arrival of diesel supply in recent days and expected in coming days and weeks has arrived on schedule as expected.
“There is no need for panic buying.”
Employment Minister Amanda Rishworth echoed those claims during a clash with Today host Karl Stefanovic, insisting there was “not an issue with supply” and warning against alarmist language.
The shift comes as global energy markets remain on edge amid market volatility caused by the Iran war.
The International Energy Agency has agreed to release up to 400 million barrels of oil to help ease the oil price shock.
The emergency intervention far outstrips the 2022 release of 182m barrels of oil by IEA countries after Russia’s full-scale invasion of Ukraine.
