<
https://reneweconomy.com.au/why-a-faster-transition-to-renewables-is-on-the-wish-list-for-central-bankers/>
"Freshly released Consumer Price Index (CPI) figures show annual inflation
dropped to 4% in May from a high of 4.6% in March, but as the Iran conflict has
shown, Australia remains highly vulnerable to global oil supply risks.
The latest drop can be fully attributed to a reduction in the increase in
transport costs, as oil prices decreased and fuel excise cuts remained in
place. This trend could still reverse in the next few months, with the fuel
excise relief only partially extended till August, and amid uncertainty over
how soon oil flows from the Middle East will recover. Prices for refined oil
products, which Australia is mostly reliant on, are particularly hard to
predict.
Then there is the question of when the next oil price shock will hit us, and
how exposed we will be when it hits.
Since 2000, oil prices have become highly volatile, in part due to frequent
geopolitical tensions, as well as the low price elasticity of oil demand.
In that period, oil prices increased by about 6.9% a year, well above the
annual CPI increase of 2.8%. Oil costs grew even more, by about 8.9% a year, as
oil use grew alongside oil prices.
In particular, diesel use increased by a factor of 2.5 to represent the
majority of Australia’s oil use, fuelled by road transport and mining.
Australia’s growing diesel use is at odds with global trends.
During the same period, Australia also transitioned from being nearly fully
self-reliant to mostly import-reliant. In the financial year 2024–25, Australia
imported 90% of its diesel, 80% of its jet fuel and 68% of its petrol – the
three main oil products it consumes.
It is now the largest importer of seaborne diesel in the world, with its
imports representing 10.1% of global net trade in 2025. Australia was also the
third-largest importer of seaborne jet fuel and petrol, representing 8.3% and
6.7% of global trade respectively."
Cheers,
*** Xanni ***
--
mailto:xanni@xanadu.net Andrew Pam
http://xanadu.com.au/ Chief Scientist, Xanadu
https://glasswings.com.au/ Partner, Glass Wings
https://sericyb.com.au/ Manager, Serious Cybernetics
