(Please note: the below does not represent financial advice or recommendations)
Rising fuel prices in Australia are increasing the cost of living, making everyday essentials like transport, food, and utilities more expensive. As global supply disruptions, economic pressures, and geopolitical conflict continue to impact oil prices, many households are feeling the financial strain.
This guide explains why fuel prices are rising, how they affect your cost of living, and practical ways to manage expenses and reduce financial stress during uncertain times.
Key Takeaways: Rising Fuel Prices and Cost of Living Pressures in Australia
Fuel prices are rising due to global supply disruptions
Geopolitical conflict, reduced oil supply, and economic pressures are driving fuel price increases across Australia, placing added strain on households.
Higher fuel costs are increasing everyday living expenses
As fuel prices rise, the cost of transporting goods and services increases, leading to higher prices for essentials like food, utilities, and travel.
Practical strategies and support can reduce financial stress
Budgeting, saving techniques, and accessing support such as financial coaching or EAP services can help individuals better manage cost of living pressures.
Why the Cost of Living Is Rising in Australia (Key Causes Explained)
Cost of living refers to the total cost of essential goods and services required to maintain a standard of living in Australia. At times of low inflation and interest rates, our finances can feel relatively stable and we’re able to save and invest more. However, when cost of living is high, affording daily necessities – as well as discretionary spending – can be more difficult. But why is Australia experiencing a high cost of living at the moment?
”“A number of Australians are experiencing increased financial pressure and that the cost of living crisis is worsening. This evidence includes: economic indicators, information reported by food relief charities and the not-for-profit sector, data and reports on the pressures facing small business, [and] broader media coverage on how the cost of living crisis is affecting individuals and households.”
Parliament of AustraliaAustralian Federal Government
Here are just some of the reasons:
- Aftermath of the COVID-19 pandemic
- High inflation rates
- High interest and cash rates
- Increased energy prices
- Wage lagging
- Global shocks (think conflict and natural phenomena)
- Increases in food prices
- Higher insurance premiums
How Rising Fuel Prices Impact the Cost of Living in Australia
Australians are now paying more for fuel as oil prices continue to rise, increasing the overall cost of living. This has added further financial pressure, with households already facing higher interest rates, food, and energy costs prior to the conflict. As these pressures compound, many Australians are feeling the strain more than ever.
”“Fuel prices in Australia have been increasing at an unusually fast rate from an average of 165 cents per litre (cpl) for regular unleaded petrol (ULP) up to 220 cpl in early October.”
NRMA Australia
What Is Causing Fuel Prices to Rise in Australia? Key Factors Explained
Conflict, continued aftermath of the COVID-19 pandemic, and supply shortages are causing oil prices to increase. In fact, prices have been rising for some time. Between February and March 2026, the ACCC notes that fuel prices have increased by 48.8 cents per litre (cpl) across Australia’s five largest cities. Since 11 March, specifically, Australians have seen fuel prices upwards of 219.7 cpl.
NRMA states that fuel challenges have stemmed from a number of other challenges:
Supply market:
- Ongoing conflict
- Oil refinery closures globally
- Supplier cuts from leading allied producers
Supply market:
- Ongoing conflict
- Oil refinery closures globally
- Supplier cuts from leading allied producers
Economic challenges:
- Increase in wholesale costs (for example, transportation of fuel)
- A slower global economy
- Our falling Australian dollar compared the US dollar (for example, NRMA says for every 1 cent fall in $A compared to the $US, we see an increase in fuel prices).
Economic challenges:
- Increase in wholesale costs (for example, transportation of fuel)
- A slower global economy
- Our falling Australian dollar compared the US dollar (for example, NRMA says for every 1 cent fall in $A compared to the $US, we see an increase in fuel prices).
With everyday Australians struggling to make ends meet, financial stress is causing considerable strain on their mental health and wellbeing. They may need financial coaching more than ever. Through EAP, employees can access expert financial coaching free of charge. Get in touch to see how we can support your organisation!
How Oil Prices Increase: A Simple Step-by-Step Breakdown
In simple terms, fuel prices rise when supply is disrupted, demand remains high, and additional costs are passed on to consumers.
Global disruption occurs
Conflict, natural disasters, or political instability affect oil-producing regions
Oil supply becomes constrained
Production slows, refineries close, or suppliers reduce output
Supply can’t meet demand
Global demand for fuel remains steady or increases
Wholesale oil prices rise
Limited supply drives up the global price of crude oil
Additional costs increase
Transport, refining, and distribution costs also climb
Retail fuel prices increase
Petrol stations pass higher costs on to consumers
Flow-on cost of living impact
Higher fuel costs increase prices for goods, services, and transport
How Countries Are Responding to Rising Oil Prices and Fuel Shortages
Countries are responding to rising oil prices and fuel shortages by introducing measures to reduce fuel demand and ease cost of living pressures. These measures aim to decrease consumption, manage supply, and ease household costs.
But what exactly are nations doing globally to ease pressures? Here is how countries are responding to fuel shortages and price spikes:
- In Australia, public transport in Victoria and Tasmania has been made free during April. The fuel excise – the tax we pay on fuel – has been halved from 52.6 cents. Australians are yet to see the savings, but the BBC reports that free public transport will save us an average of $20 per week.
- In Ireland, tax cuts have been made to decrease the cost of petrol and diesel – among several other measures.
- The UK has said they’re prepared to penalise petrol suppliers if they are found to be price gouging. Additionally, low-income households will be able to access government funding if their household is powered by oil heaters.
- China has halted crude oil exports indefinitely to prevent fuel shortages.
However, it seems that many developing nations are feeling the sharpest fallout, with fuel rationing, pleas to remain home where possible, and reduced workweeks:
The Philippines
The Philippines have declared a national emergency and have implemented a four-day work week to conserve fuel consumption. 98% of their oil comes from the Strait, resulting in their fuel prices doubling.
Myanmar
Myanmar have mandated private vehicles to alternate days of driving – each day depends on whether their licence plate is odd or even. Equally, they have introduced fuel rationing.
Bangladesh
Bangladesh have closed universities, began rationing fuel sales, and planned blackouts in a bid to preserve oil.
Sri Lanka
Sri Lanka have implemented a weekly public holiday for government agencies, as well as educational institutions. Fuel is also being rationed with motorists constrained to 15 litres per week.
How to Save Money on Fuel and Reduce Everyday Living Costs
With many of us feeling the pinch, as reality sets in that current fuel prices may become the new norm, almost all of us are having to make cuts. However, cuts can feel uncertain, stressful, and anxiety-inducing. After all, many of us have never faced this type of economic uncertainty. But there are many simple measures we can take to regain control of our finances in an unpredictable economy.
Above all, we must prioritise protecting our wellbeing. During times of economic struggle, it can feel increasingly isolating, stressful, and mentally straining. As such, understanding our financial situation and budgeting are useful tools to prevent financial burnout.
Here are some practical saving techniques provided by our finance expert and coach, Cate T, to help reduce the impact of current financial pressures on your finances:
Practical saving techniques
- Use separate accounts: keep savings out of everyday spending accounts
- Start small and scale up: even $10–$20 a week builds the habit
- Have a ‘no‑touch’ emergency fund: ideally 3–6 months of essentials
- Review subscriptions regularly: cancel or downgrade unused services
Emotional & mindset-based saving techniques
- Link savings to safety, not sacrifice: saving = less stress, more freedom
- Name your savings account: emotional labels increase commitment (“Future Me”, “Peace Fund”)
- Detach self-worth from spending: you don’t need to spend to feel successful
- Remove shame from money conversations: progress starts with honesty
”“The current economic climate is significantly difficult for many with financial pressures impacting us all both financially and emotionally. Please use these practical and emotional financial tips to help ease the burden”
Cate TFinancial Coach, Converge
Want to learn more? Watch our podcast episode with Cate to learn more about key financial wellbeing strategies:
How Financial Stress Impacts Mental Health During the Cost of Living Crisis
Financial stress is defined as the experience of worrying about money. This could be anxiety or emotional tension surrounding debt, personal finances, or the fear of being unable to afford our living expenses and necessities. According to AIHW, financial stress is at an all-time high, rising from 11% to 13% between 2022 and 2023. Equally, single parents, renters, and unemployed people feel significant financial stress – especially during times of high inflation and cost of living.
The impact on our mental health during trying times can lead to situations where:
We may struggle sleeping and may argue with others (such as a partner)
Increased feelings of anger and mood swings
Isolation and withdrawal
Guilt and delays in procuring health care due to cost
Financial Stress Support in Australia: How EAP Can Help Employees Cope
EAP offers your employees specialised support when times are difficult – especially if you’re experiencing financial hardship or want simple financial advice. If we are your EAP provider, we offer expert financial coaching. It’s a free service for eligible employees that your employer funds. Coaching can help you gain financial awareness and education, learn how to budget, and much more. Please book an appointment with one of our financial coaches. They’re here to support you, anytime, anywhere.
If you’re reading this and you’re not part of Converge EAP, it’s never too late to provide your employees with expert support during their times of need. Simply fill out the form below to contact our specialists. We make onboarding and EAP mental health support access simple, accessible, flexible, and comfortable. Book a free chat now.
Fuel Prices and Financial Stress FAQs: Your Questions Answered
Why are fuel prices rising in Australia?
Fuel prices in Australia are rising due to global supply disruptions, geopolitical conflicts, refinery closures, and increased wholesale costs. A weaker Australian dollar and strong global demand for oil also contribute to higher petrol prices.
How do rising fuel prices affect the cost of living?
Higher fuel prices increase the cost of transporting goods and services, which leads to higher prices for everyday essentials such as food, utilities, and travel—placing additional pressure on household budgets.
What can I do to reduce the impact of rising fuel costs?
You can reduce the impact by budgeting effectively, limiting unnecessary travel, using public transport where possible, reviewing subscriptions, and building an emergency savings buffer to manage unexpected expenses.
How does financial stress impact mental health?
Financial stress can lead to anxiety, sleep disruption, relationship strain, and emotional fatigue. Over time, it may contribute to more serious mental health challenges if not addressed early.
Where can I get support for financial stress in Australia?
Support is available through financial counselling services, workplace Employee Assistance Programs (EAP), and financial coaching. These services can help you manage budgets, reduce stress, and improve financial wellbeing.
