RISING oil prices along with imminent interest rate hikes are weighing down an under-pressure freight system, Regional Cities New South Wales (RCNSW) says.
RCNSW chair and Lismore mayor Steve Krieg warned of dampened productivity due to the combination of higher oil prices and freight bottlenecks.
“If we add rising fuel costs to a freight system already weakened by widespread bottlenecks, there can only be one way for productivity to go and that is backwards,” Mr Krieg said.
“Oil prices may not be in our sphere of influence, but the bottlenecks are,” he said.
“We need urgent action on the levers we can control, and this means it is time for state and federal governments to back small-scale infrastructure projects that will have a lasting impact on economic growth.”
The Regional Cities NSW Freight Bottle Neck Project has identified what it sees as solutions to improving load limits on bridges, address under-loading of higher productivity vehicles and the need for detours and longer freight routes.
The project aims to improve supply chain reliability and target freight costs that are pushing up the cost of goods for everyday households.
National Farmers’ Federation president Hamish McIntyre, meanwhile, said fuel demand had increased as the winter cropping season drew closer.
“We are already seeing signs of tightening supply and rising costs for key inputs,” Mr McIntyre said, responding to a recent roundtable by energy minister Chris Bowen.
“If farmers can’t access reliable and affordable fuel and fertiliser, some may be forced to scale back plantings. That hits farm incomes, agricultural production and food availability.”
The impact of rising fuel costs has also been felt by small businesses in the major cities.
Victorian Automotive Chamber of Commerce chief executive Peter Jones said fuel retailers were “caught in a double squeeze” absorbing rising wholesale fuel costs, while managing growing consumer frustration on the other.
"Fuel retailers are not the ones setting global oil prices,” Mr Jones said.
They're operating on margins of just a few cents per litre, yet they're the ones facing customers at the bowser when prices spike. That's an incredibly difficult position to be in.”