‘Mugs’: Treasurer Jim Chalmers’ warning for servo price gougers fleecing motorists

Treasurer Jim Chalmers says motorists should not be taken for mugs by the fuel companies as RACQ reports “unwarranted” hikes at the bowser to the consumer watchdog. As the war in Iraq now involves 16 countries, the economic concerns mount for the Australian Government, with allegations fuel companies have begun to hike petrol prices six days into the conflict. Speaking on Thursday, Dr Chalmers said motorists should not be taken for mugs. “We don’t want to see people taken for mugs at the bowser,” he told the ABC. “Service stations should not be doing the wrong thing by their customers, using the conflict in Iran, and the Middle East more broadly, as an excuse to gouge customers.” As well as Iran and Israel’s closest neighbours, the UK has now been pulled into the conflict after an Iranian drone struck a UK military base in Cyprus, and France has sent antimissile and anti-drone systems to the island. The widening conflict has moderately pushed up global oil prices and began to spark some pulses of petrol panic buying across Australia. “The key determinant of the impact on the economy will be the duration of this conflict,” Mr Chalmers said on Thursday. “This conflict is now bigger and broader. It’s no longer a matter of days, it’s a matter of weeks at least and potentially longer. And so that will have implications for the global economy. “For our economy, as a consequence, we’re already seeing big movements on oil markets, for example, and European gas markets.” The Treasurer said some of the domestic petrol price hikes seen this week were part of the usual price cycle, but added the consumer watchdog had the power to monitor the service station companies and fuel retailers. “We’ve empowered the ACCC to get to the bottom of what’s happening at service stations around the country. Obviously, there are concerning developments on global oil markets but also at local service stations,” he said. RACQ has reported alleged petrol price gouging in Queensland to the Australian Competition and Consumer Commission. Royal Automobile Club of Queensland principal economist Ian Jeffreys said hikes in the sunshine state capital were unjustified. “At the beginning of the week, the highest price we were seeing was $2.13.9 per litre. “But at the time, that was between 50 to 60 cents above the average wholesale price. And we saw no reason why prices would increase any further,” he told the ABC on Thursday. “Unfortunately, on Tuesday morning, one of the majors pushed their prices up to $2.19.9-per litre. “There wasn’t a massive increase in the wholesale price earlier in the week, and this increase was unwarranted in our view.” In the short term, conflict in the oil-rich region has some overall benefits for the Australian economy. Since the US and Israel began bombing Iran on Saturday, the Australian dollar has risen 1.4 per cent against the Euro. “AUD/EUR has increased because Australia is a net energy exporter while Europe is a net energy importer,” Commonwealth Bank global analyst Samara Hammoud said. “Europe, however, is not heavily reliant on oil from the Middle East. Only around 11 per cent of the major European economies’ oil imports are from the region.” The crucial Strait of Hormuz shipping lane, which about 20 per cent of global oil exports traverse, has been severely limited. “Energy prices have spiked since the start of the conflict amid concerns over disrupted supply,” Ms Hammoud said. “Vessel‑tracking data show supertankers diverting toward the Atlantic Basin. The volume of trade through the Strait (of Hormuz) has already dropped sharply from around 5.5 million metric tons to less than 1 million metric tons. “In addition, LNG flows from the Middle East are effectively offline until both Ras Laffan — the world’s largest export complex — and Hormuz reopen.”