Australians in the regions battling fuel shortages are at the “end of a long and fragile supply” as panic buying has exacerbated the oil crisis, a leading expert has said.

Regional towns throughout Australia have struggled with local service stations running out of either diesel or all fuel types.

This comes as many people panic buy and wholesalers face allegations of anti-competitive behaviour.

The crisis punishing Australia’s regions was exacerbated by impulsive reactions to news about the Middle East conflict’s impact on fuel availability, according to former deputy chief of the RAAF and author of a 2013 paper about Australia’s oil security John Blackburn.

“What’s happened is that supply chains (are) all choked up (and) people panic – understandably, because they’re seeing what the US President is saying changes every five minutes,” Mr Blackburn told Business Weekend.

“There is a confidence issue in government, communications are not good (and) demand went up by 50 per cent.

“We’re trying to drag 150 per cent volume of fuel through that supply chain that’s not really the best.”

He said the distribution system was not capable of handling this demand or the government choosing to release reserve fuel.

“The distribution system itself is not the world’s best designed and it’s got all these problems,” Mr Blackburn said.

“When you try to address like rural (and) remote areas – they’re at the end of a long and fragile supply chain.

“That’s why it’s so difficult to react to the problem there when part of what’s happened is we’ve caused it ourselves.”

He noted Australia’s supply chain issues are poor because over the course of 13 years the nation has gone from seven oil refineries to just two.

Australia also does not have tankers than can transport oil and rail is not an option except for in Western Australia between Esperance and Kalgoorlie.

“Our whole logistics system is like an artery that’s got clogged,” Mr Blackburn said.

“It’s very hard to move things through, it hasn’t been designed properly and we’ve ignored the symptoms.”

Australia’s regions are suffering as diesel prices shoot above $3 per litre around the country.

It comes as the price of oil has lifted above US$100 per barrel from about US$70 per barrel before the conflict erupted.