As fuel costs escalate again, regional Australia is hurting

While delivering water to properties in regional New South Wales, Dave Henry has felt the pinch of rising diesel prices.

Mr Henry operates a water cartage service across New England and the state's north-west, and has noticed diesel prices rising in the past few weeks to nearly $3 per litre.

"It's really impacting our profitability and bottom line," he said.

Mr Henry has made the difficult choice to pass that extra cost on to customers.

"People, with the drought conditions, are already struggling to get from week to week. Having to find a chunk of money to buy a load of water for some people is becoming increasingly difficult," he said. 

The recent escalation of the conflict in the Middle East has caused fuel prices to rise again.

In August, the federal government cut its fuel excise reduction.

It is not just regional industries that are hurting; families are impacted too.

Kate Gotowski lives in a regional area in southern Tasmania and drives almost two hours a day between home, work and the school drop-offs.

She spends up to $150 a week on fuel, which she said was having a major impact on her family's budget. 

"There are daily decisions about whether we do extra things as a family [and] what we're spending our money on," she said. 

"We've got to prioritise working and employment and getting the kids to school."

Ms Gotowski said her family chose to live outside of Hobart for housing affordability, but it was "ironic now" because they were being "punished with the cost of fuel".

Regions' disproportionate impact

Strategic policy specialist Andrew Henderson, principal of AgSecure and a senior fellow at the Australian Strategic Policy Institute, has investigated Australia's supply chains and the war in the Middle East.

"The bulk of Australia's fuel storage is around the coast. If you're in a regional area and you're a high-volume user, you're relying on trucks and transport tankers to transport that fuel," he said. 

"Now, with a reduced amount of regional fuel storage capacity that used to exist 20 and 30 years ago, that becomes a significant risk because you can physically run out sooner."

Mr Henderson said fuel prices were forecast to rise. 

"The reason that it has a disproportionate impact on rural and regional Australia is simply by virtue of the tyranny of distance,"

he said.

"People who live in the regions have to physically travel more and travel further to be able to do basic things that a lot of people in the city take for granted."

Hobby farmer Ryan Taylor can relate.

"I've got about [half a hectare] of lawn to mow. That uses a hell of a lot more fuel than a standard suburban backyard," he said. 

"Your food costs more because to transport the food to the supermarket the costs are going up, and they're passing that on to us. Also, to physically go and get the food, it's costing more money as well."

Mr Taylor said he was reliant on fuel to keep his property in Tasmania's north ticking over. 

"Fuel has pretty much erased any profit that we can get from this farm at the moment,"

he said.

"We're certainly lucky here that we don't derive a huge income from this farm and it's not our only source of income, but talking to farmers around the place, they're really starting to struggle."