Australian diesel prices could exceed $3 a litre if the US implements a ban on diesel exports. The Trump administration is reportedly considering such a ban to suppress local service station prices ahead of the November midterm elections.
Fuel costs in Australia have already reached levels not seen since early April. This rise is contributing to inflation risks and is making another interest rate hike by the Reserve Bank all but certain, with an expected increase to 4.6% on Tuesday.
Canberra is currently recording the highest diesel prices among capital cities, at 298.7c per litre. Prices have increased by nearly 40c a litre since the beginning of the month, adding approximately $22 to the cost of filling a 55-litre vehicle tank.
International refineries have passed on steady increases due to difficulties in securing cheap oil. Ongoing hostilities in the Middle East are preventing supply from reaching global markets, with Gulf countries' diesel exports falling to a quarter of pre-war levels. Ukrainian attacks have also restricted Russian supply.
Australia relies almost entirely on overseas diesel imports, bringing in over 18,400m litres from January to July 2026. While only 510.9m litres came from the US during this period, ANZ Bank analysts suggest a US export ban would be disruptive, as the US has increased its global diesel supply to over 1.5m barrels a day since the war began.
Saul Kavonic, an analyst at MST Financial, has predicted that Australia might need to ration diesel and face prices over $4 a litre within weeks of a US export ban. However, Dr Lurion De Mello from Macquarie University believes Australia's supply is still healthy and that prices are unlikely to reach $3.50 a litre as long as Asian refiners can access oil.