Supermarket prices to rise even higher as diesel price soars

You might be trying to cut car trips to save at the bowser, but price hikes in diesel mean your regular supermarket budget is also likely to take a hit. 

Diesel hit $2.38 per litre in some parts of Queensland at the weekend, and analysts said high prices were set to stick around.

Those in the freight, transport and agriculture industries warned motorists could expect to pay more “for some time” thanks to increased trucking costs. 

Central Queensland grazier Will Wilson said the price hikes came as the industry had gradually recovered from years of drought-enforced supply shortages.

“[Cattle] need to get to the processing and they need to get to the customer, and what we feed the animal needs to get to the farm,” Mr Wilson said. 

“We’re doing our best we can on farm, but there are going to be following costs right through the supply chain — everything from a packet of Wheaties to rump steaks.”

Increased rainfall in places like Mr Wilson’s Callide property, west of Gladstone, meant he did not need expensive feedlots, but higher diesel prices would add to the cost of getting beef from the paddock to consumers’ plates.

“We’re trying to be as optimistic and positive as we can,” he said. 

“We’ve been through a pretty tough time in the last four years as an industry and we’re constantly trying to answer consumer needs for us to produce sustainably.”

A man in a green shirt standing in front of a large green truck
Southern Queensland livestock transporter Warwick Fraser says the diesel price hike will be “catastrophic” for businesses like his, and agrees the increase will also affect consumers greatly. (ABC Southern Queensland: Anthea Moodie)

Livestock transporter Warwick Fraser, based in southern Queensland, said the price hike had been “catastrophic” for businesses like his.

“[For] our daily operating expenses, fuel equates to about 30 to 35 per cent … and just in the last week, that’s grown by a third,” Mr Fraser said.

“That puts it in a nutshell — it was already a big part of the pie for us.

“The $2 a litre at the pump that we’re seeing unfortunately may be the new norm — let’s hope it’s not, but it’s going to be very hard to run back from these levels.”

Mr Fraser agreed the cost increase would flow on to consumers at every level.

“Australia lives on the back of a truck, so we’re going to see this translate through the shopping centres and supermarkets, every part of the consumer space,” he said.

Truckies will deliver, but at a cost

Queensland Trucking Association CEO Gary Mahon said the “extraordinary” cost of fuel off the back of the pandemic, staff shortages and the recent floods was impacting significantly on the industry.

“When you roll all of that together it’s very difficult conditions for the road freight industry and as always it will deliver but it will be at an increased cost,” he said.

Two brown bulls walk along a road, in the background a white cattle truck can be seen.
Queensland businesses and consumers are highly dependent on road freight. (ABC Capricornia: Rachel McGee)

Mr Mahon said many truck drivers had applied a fuel levy to cover the extra costs, which would then flow through to consumers.

“Whether you’re picking up produce in regional Queensland and delivering through the south-east, or distributing goods across regional Queensland … it’ll flow through all the way.

“Queensland is the most decentralised state in the country so it’s highly dependent on road freight, so those costs will be passed through to the consumer.”

Nick Buick is a second generation fuel supplier for the town of Richmond in north-west Queensland and said he had never seen anything like the present price increases in fuel. 

A photo of a sign at a petrol station showing diesel at $2.29 a litre
The RACQ says a range of global factors are to blame for the cost hike, including the Russian invasion of Ukraine. (ABC Capricornia: Rachel McGhee)

“I’ve seen prices rise and prices fall plenty of times, but for it to go up this high and this fast, I’ve certainly never seen before. We are in uncharted territory,” Mr Buick said. 

“Towns like Richmond rely on the tourist season and caravan season and their biggest cost is going to be fuel and this might be a trigger point for [visitors to] not travel around Australia.” 

Expect increases ‘for some time’

RACQ Club spokesman Nicky Haydon said a range of global factors were to blame for the unprecedented prices.

“The Russian invasion of Ukraine has led to a spike in oil prices in recent weeks, while ongoing international supply and demand issues, along with high terminal gate prices, are also continuing to have an impact and flow onto prices at the bowser,” he said. 

“Oil prices remain incredibly volatile so we’re closely monitoring the situation.”

Mr Mahon said the trucking industry was readying itself for ever-increasing fuel costs.

“Depending on how the fuel and oil supply circumstances settle around the world we’ll see where it will level out, but at the moment we expect increases to come for some time yet.”

Additional reporting by ABC Western Queensland’s Alex Treloar.

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