Middle East tensions expose Australia’s fuel reliance - Convenience & Impulse Retailing
Image: (Source: iStock/HeliRy)The continuing conflict in the Middle East is placing renewed pressure on global energy markets and fuel prices, with an RMIT expert warning it highlights Australia’s reliance on. . .
Image: (Source: iStock/HeliRy)The continuing conflict in the Middle East is placing renewed pressure on global energy markets and fuel prices, with an RMIT expert warning it highlights Australia’s reliance on imported fuel and the need to strengthen long-term supply chain resilience. Dr Vinh Thai, professor of logistics and supply chain management at RMIT University, said the impact extends well beyond the transport sector, affecting businesses across the economy. “It’s no surprise that 72 per cent of Australian businesses have been negatively affected by fuel prices or availability. It’s an indication that fuel is not simply a transport sector issue but very much a systemic supply chain risk affecting the entire economy,” he said. Thai said the conflict had also affected petrochemical supply chains because of their dependence on crude oil and liquefied natural gas. “Conflict in the Middle East has had a direct negative impact on petrochemicals. There is a chain effect because crude oil and LNG are so fundamental to the production of petrochemicals, and petrochemicals are so fundamental to other manufacturers. ”He said petrochemicals underpin the production of a wide range of goods. “Everyday items, from medicines to computer chips in common electronics, are made with petrochemicals. We have built an economy and chemical industry on petrochemicals. ”Thai said Australia’s dependence on imported refined fuel left the country exposed to global disruptions despite the Government’s strategic oil reserves. “While the Government has stockpiled Australia’s strategic oil reserves, the ongoing uncertainty in the Middle East serves as a refreshed call for a more strategic approach to building energy security and enhancing supply chain resilience in the country. “Australia imports more than 90 per cent of its refined fuel. That’s efficient when markets are stable, but it leaves us exposed when global disruptions occur. “Diversification is the name of the game. We need to diversify where we source fuel from while also building Australia’s own capabilities so we’re less dependent on overseas supply. ”To stay up to date on the latest industry headlines, sign up to the C&I e-newsletter.