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Australia's Heavy Dependence on Refined Fuels Creates Some Risk of Rationing, ANZ Says

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Australia's heavy reliance on refined fuels creates some risk of rationing being required if the supply of refined products narrows significantly, ANZ said in a Wednesday report.

However, the bank added that fuel rationing is not part of its base case and it does not expect rationing to be needed.

Australia imports over 90% of its diesel, petrol, and jet fuel, which the transport, mining, and agriculture industries are heavily dependent on. Around 12% of inputs for the transport sector come from petroleum products, followed by the mining industry at around 7% and agriculture at 6%, according to the report.

"The likely fuel demand inelasticity of these industries, the impact on GDP that a shortage of fuel might have and the limited availability of short-run substitutes suggest that the household sector would likely bear the brunt of any possible rationing," ANZ said.

It noted that fuel rationing is not currently not part of the Reserve Bank of Australia's central expectations.

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