Rise in fuel costs to spark higher prices on groceries, taxis, Uber

The war in Ukraine and the NSW floods are set to send prices skyrocketing on a number of household essentials, that were already on the rise due to the fuel crisis. Find out what’s going up.

The war in Ukraine and floods in eastern Australia will accelerate the pace of food price increases, top economists say.

They predict the dramatic surge in fuel costs will raise transport expenses for meat, seafood, fruit and vegetables.

“Businesses can only absorb so much,” CommSec chief economist Craig James said.

This was confirmed by Road Freight NSW CEO Simon O’Hara.

“The cost for the end consumer will be increased,” Mr O’Hara said.

Westpac chief economist Bill Evans noted another upward force on food prices from the invasion — the surge in global fertiliser costs. Economically isolated Russia is the world’s largest exporter.

Plus there was the impact of the floods, Mr Evans said.

Last month he had been tipping an inflation rate of 4.25 per cent for the year to the end of March.

That forecast was no longer worth quoting, Mr Evans said.

He was trying to come up with a new, higher estimate.

“Things are moving so quickly,” he said.

The NRMA said petrol could hit $2.20 a litre; last week it averaged $1.82/l.

Shopping around was the only way to combat the increase, NRMA spokesman Peter Khoury said.

“Motorists need to get on the NRMA app or Fuel Check website and find the cheapest fuel in their local area before filling up,” Mr Khoury said.

Defence Force Personel assist with the clean up in Lismore in the aftermath of the devastating floods. Picture: Jason O'Brien

CommSec’s Mr James said the price of taxis and Ubers may also go up.

The floods meanwhile could end up increasing the price of a meal at the local pub.

Australian Hotels Association director John Green said deliveries weren’t getting through.

“We are now concerned flood-affected farms and stock losses in some of the main growing regions will lead to ongoing food shortages,” Mr Green said.

“This may impact price with hotel operators already struggling after two years of Covid.”

University of Canberra economist John Hawkins said the Reserve Bank of Australia would “wait to see a couple of quarters” of inflation data before deciding whether it needed to start hiking interest rates to combat price rises.

Dr Hawkins said any action by the RBA was unlikely until after the federal election, which must be held by no later than May.