The federal government has refused to rule out fuel rationing as the conflict in Iran enters its third week and global oil markets face mounting pressure. Defence Minister Richard Marles said rationing would depend on how long the conflict continues, but confirmed the government has already released 20 per cent of Australia’s domestic fuel reserves, adding about 716 million litres to the system. He urged Australians not to panic buy, stressing that supply levels remain steady.

Fuel prices have surged after Iran closed the Strait of Hormuz, a critical global oil route, pushing petrol above 2.20 dollars a litre and diesel beyond 2.60 dollars. The spike has triggered panic buying and shortages, particularly in regional communities. Several towns in Victoria and New South Wales have reported running out of fuel, with some service stations introducing purchase limits.

Farmers and regional businesses say the shortages and rising costs are having severe consequences. Some growers report they may be forced to leave fruit unharvested because transport costs no longer make economic sense. Independent federal member Bob Katter has called for the fuel excise to be halved to ease pressure on primary producers, though Treasurer Jim Chalmers has said such a cut is not under consideration.

The government has announced that up to 762 million litres of petrol and diesel from emergency reserves could be released to address supply shortfalls. Transport Minister Catherine King said additional deliveries would soon reach affected regional areas, while state leaders have pledged intervention if shortages persist.