Australia’s petrol prices increase due to labor unrest. The possibility of a strike at an Australian liquefied natural gas (LNG) facility has increased wholesale gas prices in Europe.
The Offshore Alliance union has warned that a strike at the North West Shelf facility could begin as early as September 2 if no agreement is reached regarding remuneration.
According to Bloomberg, the average petrol price in the European Union and the United Kingdom increased by approximately 10 percent on Monday. After Russia invaded Ukraine, prices increased but have since declined.
It is feared that industrial action at Woodside Energy Group’s North West Shelf facility could disrupt LNG exports from Australia, a key global supplier. Workers at two additional Chevron-operated offshore LNG facilities, Gorgon and Wheatstone, are voting on strike action, with results anticipated on Thursday.
The three facilities account for approximately 10% of the global LNG supply.
Ben McWilliams, an affiliate fellow at the think tank Bruegel, cautioned that the disruptions could impact global LNG prices.
In an interview with the BBC’s Newsday program earlier this month, Mr. McWilliams stated, “Australia typically supplies Asia, but if these strikes were to go ahead and Australian petrol was cut to Asian consumers, we would see Asian consumers looking to Qatar, and competing with European buyers there.” Mr. McWilliams stated that this would have a “knock-on effect on prices” if it occurred.
Following the outbreak of war in Ukraine, Russia reduced natural gas exports to Europe, prompting countries to pursue alternative energy sources. Numerous nations rely on LNG to cover the void.
Australia is one of the largest exporters of LNG in the globe. The other two are Qatar and the United States.
Last week, Cornwall Insight predicted that higher petrol prices caused by the unpredictability in Australia would substantially increase the Ofgem price limit in January.
It predicted a cap of £2,082.56 for a typical annual household expenditure in the first quarter of 2024, an increase from its prediction of £1,925.71 in the fourth quarter of 2023.