Australia’s fuel crisis deepened this week, with nearly 500 service stations across the country running out of petrol or diesel as panic buying compounds a supply crunch triggered by the Middle East conflict. The crisis has hit Victoria hardest after WA, with Premier Jacinta Allan confirming 101 stations without petrol and 83 without diesel — roughly one in ten outlets statewide.
At the same time, the Albanese Government moved to tighten its grip on the fuel sector, passing legislation through Parliament on Thursday that doubles the maximum penalty for price misconduct to $100 million per offence. And NSW rolled out a statewide compliance blitz, sending inspectors into service stations to catch retailers misleading motorists at the bowser.
How the crisis unfolded
The chain of events traces back to 28 February, when conflict in the Middle East effectively disrupted flows through the Strait of Hormuz — one of the world’s most critical oil shipping routes, through which roughly 20 per cent of seaborne oil supply passes. Within weeks, average petrol prices across Australia’s five largest capital cities had risen nearly 50 cents a litre.
By mid-March, shortages had cascaded from ports to regional towns. Wedderburn and Bonnie Doon in Victoria ran out of fuel over a single weekend. NSW had stations empty across Sydney and the regions. Queensland and WA reported their own disruptions. The Australian Institute of Petroleum confirmed that over 500 sites nationally had run out of at least one fuel type.
Victorian Energy Minister Lily D’Ambrosio attributed much of the immediate shortage to panic buying rather than a genuine collapse in supply. But the Victorian Farmers Federation pushed back, noting the disruption to agriculture was “quite widespread throughout rural Victoria”, with diesel shortages hitting farm machinery at the start of harvest and transport seasons.
Legislation doubling penalties for price misconduct passed Parliament on Thursday as Victoria confirmed over 100 stations without fuel and the opposition accused Labor of years of mismanagement
What Canberra is doing
Treasurer Jim Chalmers framed the new legislation — the Treasury Laws Amendment (Doubling Penalties for ACCC Enforcement) Bill 2026 — as a direct message to petrol companies tempted to exploit the crisis. The bill raises the maximum penalty for false or misleading conduct and cartel behaviour from $50 million to $100 million per offence.
“The conflict overseas shouldn’t be an excuse to profit off Australians,” Chalmers said. “We’re putting petrol companies on notice.”
The government had already extended the ACCC’s petrol price monitoring powers, enabled on-the-spot fines, and released around 762 million litres of petrol and diesel from the national reserve into the market. It also temporarily lowered fuel quality standards for 60 days, allowing higher-sulphur fuel to be sold to speed up import volumes. Energy Minister Chris Bowen has been engaging international partners to shore up supply chains, and the ACCC granted urgent authorisation for major suppliers to coordinate logistics — a move that would normally raise competition concerns but was deemed necessary given the national emergency.
NSW cracks down at the bowser
In NSW, Fair Trading took its own approach: boots on the ground. A compliance blitz covering all 2,400 service stations in the state has so far resulted in 703 inspections and 35 penalty infringement notices.
The state also directed motorists to FuelCheck, its real-time price transparency app. NSW Fair Trading Minister Anoulack Chanthivong said the blitz “sends a clear message: misleading motorists will not be tolerated.” Retailers caught breaching pricing rules face on-the-spot fines of $1,100, with court penalties reaching $22,000 for individuals and $110,000 for corporations.
What the opposition is saying
Opposition Leader Angus Taylor has been unsparing in his assessment, pressing the government repeatedly on whether Australia faces a genuine risk of running out of fuel and accusing Labor of years of inaction on energy security.
“Labor’s mismanagement of fuel security and the economy is driving up inflation and hitting Australians’ cost of living hard,” Taylor said. He has pushed for available stocks to be directed to empty regional service stations rather than capital city depots, arguing the response has been too slow and too centralised.
The Coalition has long argued that Australia’s fuel reserve strategy — a persistent vulnerability since the last domestic refinery closed in 2014 — should have been addressed years earlier. Australia currently holds around 36 days’ worth of fuel reserves, well below the 90-day benchmark set by the International Energy Agency.
The Lowy Institute noted bluntly this week that the fuel crisis was “of Australia’s own making”, pointing to successive governments’ failure to rebuild domestic refining capacity or meet international reserve obligations.
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