{"id":901611,"date":"2026-09-22T19:10:17","date_gmt":"2026-09-22T19:10:17","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/901611\/"},"modified":"2026-09-22T19:10:17","modified_gmt":"2026-09-22T19:10:17","slug":"inflation-petrol-and-electricity-why-it-feels-like-we-are-in-the-perfect-storm-of-economic-pain","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/901611\/","title":{"rendered":"Inflation, petrol and electricity: Why it feels like we are in the perfect storm of economic pain"},"content":{"rendered":"

Australian<\/a> households are bracing for a \u2018perfect storm\u2019 of variables that threaten to crush budgets as soaring fuel costs collide with rising interest rates<\/a>, sticky inflation and the cost of keeping the lights on.<\/p>\n

Rising inflation has led to three rate rises already this year, and the Reserve Bank of Australia<\/a> is expected to lift the cash rate again next week at its next meeting.<\/p>\n

\"\"<\/p>\n

Petrol prices have skyrocketed in recent days.\u00a09News<\/p>\n

The Middle East conflict<\/a> has constricted the world\u2019s oil trade, sending the price of oil and petrol skyrocketing, with unleaded petrol costing $2.30 a litre in some locations and diesel approaching $3 a litre.<\/p>\n

\u201cInflation remains too high, and households are having to devote a larger share of wallet to fuel,\u201d says CommBank Head of Australian Economics Belinda Allen.<\/p>\n

\u201cAnother rate hike is likely to impact households further, as households who left payments unchanged after the rate cuts in 2025 will now face higher mortgage payments for the first time this year.\u201d<\/p>\n

In the latest blow, electricity prices are expected to increase, adding more pressure to strained budgets.<\/p>\n

While the cost of using electricity has remained stable and decreased in some areas, other factors are at play.<\/p>\n

\u201cWhile the cost of using electricity has, in many cases, been dropping, the cost of staying connected to the grid has surged,\u201d Canstar Data Insights Director Sally Tindall told nine.com.au.<\/p>\n

\u201cHigh-energy consuming households could well have seen a drop in their overall electricity bill, while low-energy consuming households might have seen their bill go up since July 1,\u201d she added, saying the end of the federal government\u2019s rebates would also have an impact.<\/p>\n

The pressure this places on Aussie households is intense, especially at a time when inflation continues to be a concern, making goods cost more and leading to continuing rate rises.<\/p>\n

Despite goods becoming more expensive, Aussies are still spending money, which means inflation isn\u2019t falling.<\/p>\n

\u201cThey\u2019re still willing to pay for these items, even though they might complain about it, and obviously notice that the cost of goods is going up at the end of the day,\u201d Diana Mousina, deputy chief economist\u00a0at AMP, told nine.com.au.<\/p>\n

\u201cThey still have been managing to absorb these increases, which is why we’ve seen that inflation has just kept on being a problem.\u201d<\/p>\n

This has led to continued three rate rises in 2026, which are expected to continue.<\/p>\n

The cash rate has already risen from 3.60 per cent at the start of the year to 4.35 per cent, with the four big banks expecting this to rise again to 4.60 per cent by the end of the year.<\/p>\n

While there have been times in the last 15 years when inflation and interest rates have been worse, Mousina explained Aussies have felt little relief financially since the economic impact of the COVID-19 pandemic.<\/p>\n

\u201cThe cost of living crunch, which started from COVID, has just kept on going, even though it\u2019s had its ups and downs and it\u2019s ebbed and flowed throughout 2025,\u201d she said.<\/p>\n

\u201cWe\u2019ve had two cycles of interest rate rises. We\u2019ve had continuous energy price shocks and petrol price shocks, have had a lot of just general volatility in the world from wars and the uncertainty that that causes, I think that that\u2019s what makes people feel like they\u2019re not really getting ahead.\u201d<\/p>\n

\"\"<\/p>\n

Government spending being cut will help cool inflation, but could lead to other issues.\u00a0Kate Geraghty <\/p>\n

While geopolitical factors outside the government\u2019s control, most notably the Middle East conflict, have a bearing on the difficult economic climate, the federal government can rein in spending to ease pressure on inflation, according to economists.<\/p>\n

Tindall said the government needs to \u201ccurb public spending further, and implement structural reforms\u201d, warning that further cost of living relief such as cuts to the fuel excise may not help Aussies in the long run.<\/p>\n

\u201cIf the government were to entertain the idea of further cost-of-living relief it would have to be extremely careful, because unless it\u2019s highly targeted it could end up adding to our inflation woes,\u201d she said.<\/p>\n

Mousina agrees, though warns cuts in government funding will impact other areas of society.<\/p>\n

\u201cCutting government spending I think is important, but the end of the day, that does mean that some reductions to services will will have to go or lower payments that eventually go to households,\u201d she warned.<\/p>\n","protected":false},"excerpt":{"rendered":"Australian households are bracing for a \u2018perfect storm\u2019 of variables that threaten to crush budgets as soaring fuel…\n","protected":false},"author":2,"featured_media":901612,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[64,63,99],"class_list":["post-901611","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-au","tag-australia","tag-business"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/901611","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=901611"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/901611\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/901612"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=901611"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=901611"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=901611"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}