Rising Fuel Costs Bite Hard Amid Ongoing US-Iran Conflict

The escalating US-Iran war has put increased pressure on airfares, petrol, and diesel as fuel costs continue to rise. The conflict's seventh month has led to fears of further oil supply disruptions after Yemen-based Houthi militants launched attacks and seized an island in the Red Sea.

Australia's national average price of regular unleaded petrol has risen 37% since July to $2.13 a litre, while diesel prices have surged by 45% to $2.61 a litre.

Airlines are affected as fuel is their largest operating expense. Qantas chief financial officer Rob Marcolina said the airline will review ticket pricing and operating costs in response to rising fuel costs.

Virgin Australia, which previously shielded its profits from oil price shocks through extensive fuel hedging, now faces a steep bill due to reduced hedging of jet fuel refining margins.