India’s surge in refined diesel exports is emerging as an important pressure valve for Australia’s fuel market, helping keep regional supply moving at a time when diesel shortages and price shocks have rattled service stations across the country.

Shipping data reported by Reuters shows India’s diesel exports to Southeast Asia climbed to a more than seven-year high in March, with traders specifically tapping Indian supply for Southeast Asia and Australia after the war-linked disruption to Middle East crude flows and China’s restrictions on refined fuel exports.

That matters for Australia because the country is heavily dependent on imported fuel and gets most of its refined supply from Asia, not from domestic refineries. Australia now meets less than 20 per cent of national fuel demand from its remaining refineries, while the rest is sourced through regional supply chains. In that setting, extra Indian diesel moving into Asia helps widen the pool Australia can buy from as buyers scramble for alternatives.

The scale of India’s shift has been substantial. Reuters said about 1 million metric tonnes of diesel moved from India to Southeast Asia and Australia in March, with around half headed for Singapore and about 90 per cent of the trade shipped by Reliance Industries, operator of the world’s largest refining complex. Analysts quoted by Reuters said India has become one of the main replacement suppliers as Asian buyers that would usually rely on Chinese and northeast Asian cargoes look elsewhere.

For Australia, the immediate issue is not just price but physical availability. The Albanese government has said Australia imports about 90 per cent of its fuel and has faced localised shortages, with several hundred service stations running out of petrol or diesel in recent weeks. Australia had about 30 days of diesel and jet fuel on hand late last week, while more than 53 fuel shipments are currently on their way to Australia from Asia, the United States, Mexico and elsewhere.

Indian diesel is not a complete fix on its own, but it is helping ease the squeeze. Reuters reported traders expect the extra Indian cargoes to ease supply tightness into April, with some market analysts believing the arbitrage still favours east-of-Suez sales for months yet. That gives Australian buyers a better chance of finding replacement cargoes through Asian hubs, especially while the federal government focuses on what Anthony Albanese has called getting more fuel here for Australians.

In practical terms, that means diesel refined in India is becoming part of the regional buffer, helping keep Australian trucks, businesses and service stations supplied during a volatile period. It is not the only source keeping the system moving, but in a market where Australia relies on Asian refining and every available cargo matters, India’s export surge is helping stop a tight market from becoming an even sharper supply crunch at the bowser.

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