Australia already had a plan to wean the transport system off foreign oil.
Six months ago, the federal government released its net zero roadmap for transport, outlining measures to electrify transport, support alternative fuels and encourage more public transport, walking and cycling – by 2050.
But now, a plan is needed in weeks, not decades, as fuel prices spike amid the unfolding conflict in the Middle East.
Even if the strait of Hormuz re-opens, the current fuel shock is unlikely to be the last, says Assoc Prof Stuart Walsh, a resources engineer at Monash University.
“We’ve got solutions we can work towards, to hopefully come up with a future in which we’re less dependent on foreign energy sources, and more reliant on the stuff that we can make in Australia.”
Why is Australia so reliant on foreign oil?
Australia is heavily reliant on liquid fuels like petrol, diesel and jet fuel for its modern economy, Walsh says. That includes transporting commodities across the country, agricultural and mining exports, and international travel.
“Only about 4% of fuel we use in Australia is Australian crude refined in Australia,” Malcolm Roberts, chief executive of the Australian Institute for Petroleum, told ABC News. “We’re completely dependent on imported fuel.”
Australia imports much of its refined fuel from countries in Asia, says Prof Hussein Dia, a transport expert at Swinburne University, which in turn rely on crude oil from the Middle East.
“Moving away from oil is as much about stability and security as it is about climate action,” he says.
In Australia, the vast majority of liquid fuels are used in transport (70%), mostly for road-based vehicles like cars, trucks and buses.
“We’re very exposed to price shocks when they do occur,” says Prof Jago Dodson, who researches urban policy at RMIT University. About 70% of travel across metropolitan areas is by automobile, he says, with higher rates of car dependency in the outer suburbs due to limited public transport.
What can be done in the coming weeks?
Energy minister Chris Bowen has announced a series of measures to increase supply – relaxing fuel standards and releasing 762m litres from domestic reserves.
Supplies are still shipping in, Roberts says, but petrol stations are facing “an unprecedented level of buying, far greater than what we saw at the beginning of the Russia-Ukrainian war”.
Helen Rowe, transport lead at Climateworks Centre, says people can tend to get “stuck in a rut” with their travel, and the crisis might prompt them to try something different – perhaps taking advantage of Queensland’s 50c fares on public transport or cheaper regional tickets in Victoria.
“Prices go up, and people might start thinking the train doesn’t look like a bad option,” says Ken Baldwin, energy expert and emeritus professor at ANU. Anything that increases the number of passengers per litre of fuel will help, he says.
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The Greens say free public transport should be considered as part of the state and federal response. The Victorian Greens say a month’s worth of free travel would cost the state $79.4m but save households up to $500.
But boosting public transport, walking and cycling in some outer suburbs would be “incredibly difficult” in the immediate term, says Dodson. Even as prices spike, many families will continue to prioritise fuel – particularly for work travel – alongside rent and food.
People may drive less and carpool more, or work from home, says Dia, who lived in Jordan during the Iraq war and experienced rationing first-hand. “One of the things we had to do was carpool with our neighbours and colleagues to work.”
Transitioning the nation’s fleet from petrol-fuelled cars to electric vehicles will not happen quickly, but some individuals and households might bring forward the decision to buy an electric bike or car – if they can afford it – or opt for a more efficient hybrid. “Even moderate EV penetration can make a noticeable difference,” he says.
Rail already moves the most freight in Australia, according to government figures, and more goods could be shifted that way – particularly non-perishable products, says Dia.
Airlines are particularly exposed to rising fuel prices, with fuel costs accounting for about 30% of operating costs, says Rico Merkert, a professor in transport and supply chain management at the University of Sydney. Options to reduce fuel use are limited, but include optimising routes, reducing weight and efficiencies while taxiing, takeoff and landing. Some low demand routes could be paused.
Global conflicts have made the situation more challenging, he says, with international flights required to take detours – adding fuel burn – around the Middle East, as well as Ukraine and Russia.
What about in the next few years?
While not immediate, better bus services could be rolled out within a timeframe ranging from six months to a few years, Dodson says. “We could update timetables, reorganise bus routes fairly quickly to more optimally serve ‘go anywhere, anytime’ travel across the whole metropolitan area.”
A 2023 study by Infrastructure Victoria found faster, frequent and more direct services could be achieved within two to five years, increasing use by 110%, and removing 63,000 vehicles from Melbourne’s roads.
Pop up bike lanes can also support people cycling for local travel, says Dodson.
Existing state targets for electric buses could be accelerated, he says. New South Wales, for example, is already committed to electrify Sydney’s bus fleet by 2035. Several countries, including China and Denmark, have managed to grow their electric bus sales from 6 to 60% in six years or less, according to the World Resources Institute.
Bringing forward incentives for zero emission trucks and encouraging freight on to rail would be a “win-win-win” for communities, says Rowe – reducing emissions, pollution and congestion.
“The easiest way to wean ourselves off petrol and diesel for passenger transport is vehicle electrification – going electric,” says Dia. That’s because electricity is produced locally – whether it’s coal, gas or renewable – and not dependent on imports.
Higher petrol and diesel prices could drive a surge in electric vehicle sales, saving about 1bn litres of fuel for every 1m cars switched. About half of all light vehicles sold in Australia over the next decade would need to be electric in order to meet emissions targets, according to the Climate Change Authority. It’s the same direction of travel, just faster.
Some solutions could take decades
“Obviously in the long term, the world is shifting towards a completely electric economy, so that we’ll be using batteries, and possibly hydrogen fuel cells,” Baldwin says. “No one will then care what happens in the strait of Hormuz.”
Better public transport infrastructure is needed to shift larger-scale suburban commuting and car-driving patterns, Dodson says.
“We’ve spent a lot of money, especially in places like Victoria and Sydney, building up large motorway networks, large road infrastructure, without any kind of thinking about whether that’s an optimal approach,” he says. A focus on servicing new growth areas with public transport would help buffer cities against future shocks.
Sustainable aviation fuels (SAF) – made from non-petroleum feedstocks like agricultural wastes or natural oils – can be blended with jet fuel up to 50%, Merkert says. But the fuels are not yet competitive on cost, or produced at sufficient scale. Qantas is already using SAF and aims to make it 10% of fuel use by 2030 and 60% by 2050.
Walsh says the current crisis is “a great motivator to just think about where we get our energy from and what our energy supply chains look like”.
“Some of us are motivated by the impact of transportation and the consumption of fuels and energy on the environment. But many of us are much more strongly motivated by the impact on our hip pocket. And sometimes also the impact in terms of the security of our country.”