The last time we rationed fuel

A history of fuel rationing in Oz

The Albanese Government has just launched a new media campaign encouraging Australians to use less fuel. As the war in the Middle East continues to pressure global oil supplies, the campaign is part of an attempt to avoid fuel rationing - something we haven’t had to do since the 1970s. So in this Squiz Shortcut, we’ll take a look at:

• What we’ve done in the past with fuel rationing

• What it would take to get to that stage again

• And how it might work…

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Squiz the Shortcut

What exactly is fuel rationing?
It’s when the government limits how much fuel people can buy to make sure supplies last longer. That can mean placing restrictions on how often people can fill up or how much fuel they can buy at a time. It’s only ever been introduced during major crises like war or a severe supply disruption.

When has Australia done this before?
The first major example was during World War II. Oil supplies were under serious strain and the government needed to make sure there was enough fuel to support the war effort over several years. 

Was the country prepared for that?
Not really… There had been talk in the 1930s - when the motoring industry was very much still in development - about building up long-term petrol reserves, but it never happened. So when war broke out in 1939, Oz was caught short (even though we actually had 3 months’ worth stockpiled which is more than the 30-40 days’ worth we have now…). 

What happened to bring about rationing?
At first, the government tried to avoid rationing by encouraging people to voluntarily cut back. There was a big public campaign urging Australians to use less fuel - but as soon as rationing was floated as a possibility, people started hoarding petrol instead.

Sounds familiar…
Sure does… the Australian War Memorial website has a piece on this. It says there was a proposal “that consumers should be swamped with propaganda designed to promote voluntary economy in the use of petrol, in the hope that they would respond with such enthusiasm that rationing would not be necessary…” It goes on to say - “what actually happened was that as soon as rationing was mentioned, massive hoarding took place.”

What was the next plan?
After that, the government tried promoting alternatives like powering vehicles with gas by using charcoal burners, but they weren’t very popular or practical. Eventually, with supplies running low, fuel rationing was officially introduced in October 1940.

Was it straightforward to roll out?
Not at all. Setting up the system was complicated. There were delays, and people rushed to buy petrol before restrictions kicked in. And once it was in place, there were stacks of complaints - and restrictions only got tighter as the war went on. Lots of people switched to bikes - again, something that’s also happening at the moment….

Did rationing end when the war did?
Nope… When the war ended in 1945, the UK was in huge amounts of debt - and given that our ties to the UK were much stronger than they are now, Australia was expected to help support the UK pay off its debt to the US post-war. That meant rationing continued for years…

How did Australians react?
Rationing was deeply, deeply unpopular with the Australian public. Only after it was challenged in the High Court by a group of businesses did it come to an end. They won that case, petrol rationing was abandoned - and no prizes for guessing this next part - people started hoarding fuel again. 

What was the fallout from that?
The huge run on petrol meant that it became much more tricky to find - which caused chaos in industries that no longer had access to the petrol they needed. Shortly after that, the incumbent Labor government lost the election, Robert Menzies came to power on the promise that he’d abolish rationing - which he did in February of 1950 - and he went on to be our longest-serving PM. 

When was the next time rationing happened?
That takes us to 1979 - a major year in world history. It was the year of the Iranian revolution which triggered the second major oil crisis of that decade. The first was in 1973, which came as a result of the Yom-Kippur War, and then the second came in 1979. 

What was the main reason for the disruption to oil supplies?
The Iranian revolution caused such a disruption because many of the protestors were workers in the oil sector. That led to a downturn in production which disrupted international supplies, but Australia wasn’t actually that hard-hit directly - in terms of oil supply at least. In NSW, a strike by workers at a Caltex oil refinery caused supply chaos as well, and it was the combination of those 2 events that led to a fuel rationing initiative…

Did Australia handle it differently?
Yep… And it worked much more smoothly than it did during the war. Instead of long-term rationing, there was a short-term system where drivers could only fill up on certain days depending on if their number plate was odd or even. It only lasted a few weeks and helped stabilise supply. But Australia was in a vastly different position then…

Just explain that a bit more…
Back in the 1970s, we weren’t as reliant on fuel imports from other countries. At the moment, we depend on other countries for 90% of our fuel supplies - mainly Singapore, South Korea and Malaysia. They rely on oil imports from the Middle East, which leaves us - and many other countries who buy from them - vulnerable if that supply is disrupted. 

What was the picture back in the 1970s?
The chief economist for Commbank, Luke Yeaman, says that only 5-7% of the world’s global oil supply was affected in the 1970s - it’s now more like 15%. 

So, is fuel rationing actually on the table for us again?
The government says no - at least for now. They’ve pointed to guarantees from our suppliers in South Korea and Singapore, and the 30-40 days of fuel we have in reserve. But if the war in the Middle East keeps going, it could be a problem down the line. Reports say the government has only seriously planned for rationing if reserves drop to around 10 days’ worth…

If it does happen, how would it work?
We don’t really know what it’ll look like for sure. Some reports say restrictions on the dollar value of fuel people can buy (so, $40 or $50 at a time, that sort of thing) could be something that’s introduced. That’d be for everyday motorists but it’d likely be a different story for emergency and essential services. 

What would happen with them?
There’s an act called the Liquid Fuel Emergency Act of 1984 - it’s a fun read - and the energy department says that ambulances, police, fire and public transport would sit outside of that. But again, we don’t know what it will look like… 

So where are things at right now?
Australia is currently at Stage 2 of its fuel security plan, which means there’s some pressure on supply but nothing critical yet. Rationing would only be considered at the most serious level (that’s Stage 4) so for now, it’s more about monitoring the situation and encouraging people to cut back where they can. So we’re still playing the waiting game to find out whether it’s a minor shock, like in the late 1970s, or a major economic earthquake, like in the 1940s.

Onto our Recommendations

Listening: This episode of the ABC’s If You’re Listening - it gets right into the background of what happened the last time we ran out of oil. 

Reading: And here’s the piece from the Australian War Memorial we mentioned - it’s a really expansive look at the history of fuel rationing during World War II. 

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