Fuel crisis hits Australia 

“Known knowns, known unknowns and unknown unknowns”

This was former US Defense Secretary Donald Rumsfeld’s famous quote on intelligence reports on weapons of mass destruction used to justify the invasion of Iraq in 2002. It sounds eerily familiar to another Donald’s justifications for the war on Iran.

Fast forward to April 2026, and the conflict is turning into a nightmare for the Trump administration, the Middle East, and every nation dependent on Gulf oil.

The Australian Government, the states, and the rest of the nation are now grappling with the hard reality of rapidly diminishing fuel reserves and rampant price escalation. It’s a perfect storm of limited supply, excess demand, and energy costs heading north.

As Easter approaches, the Albanese Government has had a ‘known known’ since the outbreak of the war. Australia’s supply chains are highly vulnerable, compounded by a lack of national petroleum reserves.

For President Trump, it has been a ‘known unknown’ as to how effective Iran’s response has been in attacking other Gulf states and in closing the Strait of Hormuz following the joint attack from the USA and Israel.

Inside Canberra, the government is on red alert. The PM moved to calm the nation with a pre-Easter live TV broadcast. Unfortunately, an economic train crash is unfolding, potentially on a magnitude greater than the COVID crisis—a classic unknown unknown.

For Treasurer Jim Chalmers, it’s a perfect storm requiring a perfect juggling act. Tax reform was to be the central theme, but events are overtaking reality. Rising expenditure through anticipated cost-of-living measures will be needed to offset skyrocketing fuel prices (if you can get it) and diminishing revenue, such as cuts in fuel excise and road user charges. Plans to raise further taxes on gas exports (LNG) bound for North Asia will be tempered by the realisation that Australia is more dependent on refined petroleum from the likes of Japan, South Korea, and China. So, we need to be nice.

Equally alarming are headwinds hitting Australia – shortages not just in diesel, but also plastic, urea, and fertilisers essential for winter cropping in regional Australia.

The message for many of our SAS clients is simple. If you’re an essential service or play a critical role in the supply chain, you need to move now if you want the ear of the Government. There will only be a short window after Easter to achieve this objective prior to the Federal Government going into budget lockdown on 13 May. This was the same advocacy strategy adopted during the COVID pandemic. The SAS team worked tirelessly, around the clock, with clients, stakeholders, and governments to achieve collective outcomes.

Readers of the Inside Word should not underestimate the financial conundrum Australia faces with fuel and supply shortages, possible stagflation, and rising interest rates eating at the heart of middle Australia.

On the political front, the recent South Australian election saw the sweeping re-election of Premier Peter Malinauskas and his ALP government, at the expense of an ever-diminishing Liberal Party and a resurgent One Nation. The next test for the popularity of Pauline Hanson’s One Nation and the Coalition will be the Farrer by-election set for Saturday, 9 May – two days prior to Federal Budget week.

At SAS Group, our job is to help navigate the ‘known knowns’ or even workshop the ‘known unknowns’ for your business.

As Chairman of the SAS Group, I do fear we are entering uncharted waters due to the war and its direct impact on the global petrochemical industry – the lifeblood of the industrialised world.

There are no easy choices for Trump: escalate with ground troops and suffer the consequences or de-escalate (claiming victory) and let Iran control 20% of the world’s oil supply through the Strait of Hormuz.

You would have thought the lessons from history and American adventurism in the Middle East under former President Bush Jr and Donald Rumsfeld would have been learned. Sadly, the consequences should have been known by the current President Donald Trump and his administration, rather than starting a war with an unknown outcome.

Happy Easter.