Treasurer Jim Chalmers has warned Aussie motorists they should brace for higher petrol prices as the Middle East conflict forces up costs.
"Further escalation of the conflict in the Middle East does risk more economic uncertainty, and one of the ways that we observe and monitor this uncertainty is when it comes to the global oil price," he said yesterday.
"We are seeing a spike in oil prices, and that has consequences for motorists and families and communities here in Australia and right around the world."
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Nearly a third of the world's oil comes from the Middle East.
Over past months the easing price of crude oil provided relief at the bowser for Aussie motorists, with the price dropping well below $2 per litre in most capital cities.
But this week the international oil price benchmark Brent crude jumped and was trading at about $77 a barrel, roughly 7 per cent higher than 10 days ago.
Chalmers said that the Treasury's "rough rule of thumb" suggests every 10 per cent increase in the oil price recorded during a year carves 0.1 per cent off Australia's gross domestic product and adds about 0.4 per cent to inflation.
"If those kinds of spikes are sustained or, indeed, of course, if they get worse you can see the very direct impact that has on economies like ours and economies right around the world," he said.
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"Further escalation of the conflict in the Middle East does risk more economic uncertainty."
Chalmers said the consumer watchdog the ACCC would be keeping an "eagle eye on petrol prices to make sure that people are doing the right thing".
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