Rising fuel costs, supply woes hurt Australians

Fuel prices and supply problems are putting growing pressure on Australian businesses, with new official and industry surveys pointing to the ripple effects of the global energy disruption caused by the closure of the Strait of Hormuz.

Experts say the Middle East crisis is having a significant impact on Australia, underscoring the need for the country to draw on China's global leadership in electrification and decarbonization to strengthen energy security and build economic resilience.

The Survey of Business Conditions and Sentiments by the Australian Bureau of Statistics, or ABS, showed that 72 percent of Australian businesses had been negatively affected by fuel prices or fuel availability.

The survey, released late last month, was revived for the first time since June 2022 after originally being introduced during the COVID-19 pandemic to help track how major disruptions were affecting households and businesses.

Tom Lay, head of business statistics at ABS, said businesses across all industries had been affected by rising fuel costs amid global volatility and supply chain disruptions.

"One in six businesses experienced disruptions in their supply chain, with transport, logistics, agriculture and small businesses among those most affected," Lay said in a statement.

According to the survey, which was conducted between May 4 and 15, more than one-third of businesses reported a fall in revenue over the previous four weeks. Half of the businesses reported higher operating expenses, with fuel prices and freight and delivery costs being the most commonly cited reasons.

Tim Buckley, founder and director of the Australian think tank Climate Energy Finance, told China Daily that the ABS figures showed that the fuel pressures were having a significant impact on Australian businesses and consumers, "both directly, and indirectly" due to the rise in general inflation and the resulting increase in interest rates.

The Reserve Bank of Australia raised the cash rate by 25 basis points to 4.35 percent in May, its third consecutive rate hike this year.

"Business confidence has taken a hit, and economic activity is facing a significant headwind as a result," Buckley said, adding that the Middle East conflict could continue for a long time.

"This massive disruption is driving a rapid consideration of the need for deploying solutions at speed and scale, leveraging the global leadership evident in China's move to embrace electric vehicles and electrification over the last decade," Buckley said.

"Australia needs to embrace electrification and decarbonization solutions that concurrently build our energy security," he said, noting that EV adoption in the passenger vehicle market is already accelerating, while the government and businesses are considering how best to speed up EV adoption across road transport and mining sectors.

The new ABS figures align with findings from the latest survey by the Australian Chamber of Commerce and Industry, which found that 94 percent of its respondents were affected by fuel supply pressures, while weaker customer spending, delayed investment and reduced nonessential spending were also identified as key pressures.

Buckley from Climate Energy Finance said the solution to the current energy crisis is to "accelerate the electrification of the energy, transport and industry sectors", and added that he expects capital flows into zero-emissions domestic energy solutions in Australia to accelerate.