You’ve likely noticed the high cost of petrol – now $2.20 a litre in some parts of the country. It’s a knock-on effect of the war in Ukraine, and there have been calls on the government to reduce the petrol excise, or the tax we pay per litre, in the next federal budget, due in two weeks.
Prime Minister Scott Morrison said there was potential for the federal budget to address the petrol excise, but he made no promises. “I think Australians know that what’s happening with petrol prices at the moment is being caused by what’s happening with the war in Europe,” Morrison told Channel Nine’s Today program. “We’re working with other countries around the world at the moment in terms of releasing fuel reserves to try and alleviate the pressure on fuel prices.”
But the impact isn’t just being felt at the pump. Food supplier SPC has confirmed 100 staple products – from baked beans to dried spaghetti – will go up in price by 10 to 20 per cent as the Australian company passes on production and distribution costs to its customers.
“Things like petrol, the price of oil, has gone up in price and that impacts all of the supply chain – it impacts our farmers, our partners and those that supply us with packaging,” said SPC chairman Hussein Rifai on RN Breakfast. “Unfortunately we have to pass that cost on to the consumer.”
It’s not just petroleum (or plastic, made from cellulose, coal, natural gas, salt and crude oil) that’s risen in price. Crude oil coal has gone up by 40 per cent. And the cost of iron and tin has risen too. Rifai explained the affected commodities ranged from pantry goods to personal products: “It’s not limited to SPC or to one product or category.”
After three years of the pandemic and three weeks of the war in Ukraine, the rising costs of everyday items is not just impacting Australia.
A report by the Food and Agriculture Organization of the United Nations indicated that if “the conflict keeps crude oil prices at high levels and prolongs the two countries’ reduced global export participation beyond the 2022/23 season, a considerable supply gap would remain in global grain and sunflower seed markets”. It added: “This would keep international prices elevated well above baseline.”
Fuel at $2, a 400-gram can of beans jumping from $1.70 to $2.20 … Maybe you think this inching up in cost won’t affect you. Perhaps paying $7 for a cup of coffee would?
Australians could soon be paying up to $7 per cup of coffee, the ABC predicted in a recent article about the impact of shipping costs and natural disasters in coffee-growing regions.
David Parnham, president of the Cafe Owners and Baristas Association of Australia, told the ABC: “There are shortages obviously from catastrophes that are happening in places like Brazil with frosts, and certain growing conditions in some of the coffee growing areas … The cost of shipping has become just ridiculous.”
Sadly, federal finance minister Simon Birmingham offered little comfort in an interview with the Today show. He echoed the Prime Minister’s comments that the federal budget would take into account the difficulties faced by the war in Europe and the pressures of Covid lockdown recovery. “When it comes to fuel prices, Australians understand and know it’s been driven by Russia’s horrific actions against Ukraine and the disruptions that’s caused globally. It’s not a factor caused here in Australia,” he said.
The cost of living is expected to be a big talking point in the lead-up to the election. Though the unemployment rate is sitting at four per cent, there are fears the floods in Queensland and northern New South Wales might cause unemployment figures to rise according to the Guardian.
Reserve Bank Governor Philip Lowe also said that Russia’s invasion of Ukraine could see a rise in inflation around the world. “This new supply shock will extend the period of inflation being above central banks’ targets,” said Dr Lowe at the AFR Business Summit on March 9.
He added that the effects from the east coast’s floods will also contribute to price rises. “We will see higher prices for many fruits and vegetables, the supply chains have been interrupted again and some of the growing areas have been adversely affected.”