Petrol has topped $2.20 a litre in parts of Australia, and diesel has surged past $2.60. The spike has pushed the consumer watchdog, the ACCC, to call an emergency meeting with major fuel suppliers.
Car listings platform Carsales reported a 76.7 percent jump in searches for electric vehicles after fighting broke out involving Iran. That interest is turning into sales.
Battery electric vehicles made up 11.8 percent of new car purchases in February, according to the Electric Vehicle Council and Federal Chamber of Automotive Industries. That is a record, and double the figure from the same month in 2025.
The reason prices are high is clear. Strikes on Iran pushed the Brent crude benchmark to around US$104 a barrel, up from roughly US$68 a few weeks earlier.
Fears about fuel supply have made things worse. Energy Minister Chris Bowen told ABC’s 7.30 that Australia holds around 2.7 billion litres of diesel and 1.5 billion litres of petrol domestically. Even so, some regional stations have already closed temporarily because of a rush by consumers.
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Suburbs on the Outer Edge Are Leading the Charge
The shift is not happening evenly across the country. Data from the National Automotive Leasing and Salary Packaging Association shows EV purchases under novated leases are concentrated in outer city postcodes.
These include areas roughly 30 kilometres from Brisbane, outer Melbourne suburbs, and greater Western Sydney.
People in those areas face long commutes, which pushes up fuel costs. Many also have rooftop solar they can use to charge a car cheaply at home.
Research by Primara Research for renewable energy company green.com.au found that 25 percent of drivers are now thinking about buying an electric vehicle. Before the Middle East conflict escalated, that figure was just 7 percent.
A separate finding from the Australian Finance Industry Association showed low-emission car loans grew almost 20 percent through 2025, reaching $7.37 billion and covering more than 129,800 vehicles.
The cost of buying an EV is also changing. The price gap between electric and petrol cars has narrowed, with entry-level models now sitting below $25,000.
BYD’s Atto 1, currently Australia’s most affordable electric car, starts from $23,990 and offers 220 kilometres of range from its smaller battery. That is enough for most daily city driving.
Most Australians drive around 28 kilometres a day on average, meaning many could go several days between charges on a modern EV.
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Policy Cloud Hangs Over the Momentum
The surge in demand comes at an awkward time for government policy. Federal Treasurer Jim Chalmers has flagged a review of the fringe benefits tax exemption for electric vehicles.
That scheme has helped nearly 100,000 Australians buy EVs since it started in 2022. A road user charge for EV drivers is also being considered.
Electric Vehicle Council CEO Julie Delvecchio said keeping the discount was more important than ever. She said EVs give households more control over their budgets and protect them from swings in global oil prices. Rewiring Australia CEO Francis Vierboom made a similar case.
He said battery-powered vehicles run on electricity made in Australia, including cheap rooftop solar. The fuel that powers conventional cars comes from one of the world’s least stable regions.
Research from Scandinavia adds weight to that argument. A Nordic study published last month found that a 1 percent rise in petrol prices was linked to a 0.85 percent increase in EV sales across Denmark, Finland, Norway and Sweden.
If that holds true in Australia, the recent price spike at the bowser could push EV uptake well beyond current forecasts.
