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Writer's pictureCrest Economics

Rising Oil Prices for Australians- Oct 2024

Partisan debates over the Middle East conflict have dominated politics recently. Although, the issue feels distant to Australia, Treasurer Jim Chalmers has warned that rising oil prices may be a direct consequence of the crisis. Currently, oil prices are 7% higher than two weeks ago, and Treasury estimates that a 10% increase sustained over a year could reduce GDP by 0.1% and raise inflation by 0.4%. Accordingly, this highlights the sensitivity of the Australian economy to global supply shocks.


Although nothing is certain about the coming months, the potential implications are obvious. Consumers and households would feel the effects at the petrol pump of higher oil prices. The Reserve Bank is also closely monitoring oil prices as it may influence interest rate decisions. Any sustained rise in fuel costs could delay the government’s hopes for rate cuts before the next election. Domestically, Labor’s focus remains on cost-of-living measures and housing reform, but critical bills are stalled, and the opposition has yet to release detailed policy, particularly on their nuclear power plan, raising concerns about their fiscal strategy.


As the 2025 election nears, both sides must balance economic management with voter sentiment. Past campaigns underscore the importance of economic credibility, particularly in managing price stability and stabilising sectors such as housing and energy.



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