Diesel price surge squeezes Australian farmers and pushes inflation higher

Diesel prices are now far above pre‑war levels, climbing by more than 50 per cent. The conflict in the Middle East has forced the closure of the Strait of Hormuz, cutting crude oil exports from the Persian Gulf to roughly half of what they were before the war. Because Australia imports about 80‑90 per cent of its diesel, the country is especially vulnerable to these global price swings.

For wheat and sheep farmer Adrian Roles, who works near Wagga Wagga in New South Wales, the surge in diesel, fertiliser and pesticide costs is hitting hard. He told ABC News that the extra expenses are eating around 40 per cent of his profitability, and he cannot simply pass the costs onto buyers because his farm sells into a global commodity market.

Neil Chambers, director of the Container Transport Alliance Australia, says transport firms are immediately shifting the higher fuel costs onto their customers. This pass‑through is one of the reasons inflation has risen to 3.6 per cent for the year to July, according to the latest data.

Higher transport costs affect almost every product that reaches Australian shoppers, meaning the diesel shock spreads far beyond the farm gate. Economists note that regional areas are more exposed to these price pressures, and with no clear end to the Middle East conflict, the higher fuel prices could persist for years.

The diesel price surge shows how a distant war can tighten farm margins, raise transport fees and lift everyday prices, linking global oil markets directly to the cost of food and other goods in Australian households.

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