Australian motorists could be paying more at the petrol pump for years to come, with an energy expert warning the fallout from conflict in the Middle East could keep fuel prices elevated beyond 2030.
Speaking to Sunrise on Tuesday, John Blackburn AO, fellow at the Australian Institute of Energy, said the International Energy Agency (IEA) had predicted no change to fuel prices through 2027.
“When you look at the problems we have with oil, and separately the problems with diesel refining capacity, those prices aren’t going to come down for a long time,” he said.
“Depending on whether the war continues or there is some resolution, it is years for the oil supply chain refinery capacity to recover.
“During that period, people will want to restock the emergency stocks.
“This is a problem that goes way beyond 2030 in my view.”
Petrol prices in Australia remain about 65 cents a litre higher than they were in February, before the US and Israel went to war with Iran.
Oil prices hit a high of $US117 a barrel in April amid inflation and instability in the region.
Why fuel prices are staying high
While more oil is flowing into and out of the Middle East, Blackburn said the loss of refining capacity and the need to replenish emergency oil reserves would continue to put pressure on global fuel markets.
He said between 60 and 80 per cent of pre-war oil volumes were still coming out of the region, but the global supply of refined fuels remained under pressure.
“With the loss of refining capacity from the Middle East and the Russian War, that’s taking out something around about 60 per cent of the trade coming from those areas,” he said.
“Diesel prices, because of the lack of refining capacity will stay high.”
The distinction is important because crude oil must be processed at refineries before it can be turned into usable fuels such as petrol and diesel.
Even if more crude oil becomes available, reduced refining capacity can limit the supply of finished fuel, keeping prices high for consumers.
Extracted in full from: https://7news.com.au/sunrise/motorists-warned-fuel-prices-likely-to-stay-high-beyond-2030-c-23076413.amp
