Panic buying then and now: What toilet paper and petrol reveal about Australia’s real supply chain risks

Australia’s experience with panic buying during the early months of the COVID‑19 pandemic has become shorthand for irrational consumer behaviour. Images of empty supermarket shelves and confrontations over toilet paper in 2020 were widely shared and, in hindsight, often treated humorously. Six years later, panic buying has re‑emerged, this time centred on petrol and diesel, driven by conflict in the Middle East and concerns about fuel security. While the behaviours appear similar, the underlying risks and policy implications are materially different.

The 2020 toilet paper episode: perceived scarcity, not systemic failure

The toilet paper shortages of 2020 were not caused by a collapse in production or a lack of raw materials. Australia produces toilet paper domestically, and manufacturers were able to increase output relatively quickly. The shortages instead reflected the interaction of “just in time” retail inventory systems with a sudden, fear driven spike in demand. Toilet paper is bulky, takes up significant shelf space, and is typically stocked in limited quantities relative to sales volumes; small increases in purchasing behaviour were enough to clear shelves rapidly.

Behavioural research at the time pointed to social proof and anxiety as key drivers. Consumers responded less to official advice than to visible cues—empty shelves, viral images, and reports of shortages overseas. Once scarcity became visible, purchasing behaviour escalated, reinforcing the impression of a genuine shortage. In economic terms, the episode was primarily a retail logistics issue amplified by psychology and media dynamics, rather than a failure of national supply chains.

The current petrol panic: behaviour layered on structural vulnerability

The current wave of petrol and diesel panic buying, triggered by the Middle East conflict and threats to shipping routes, also reflects herd behaviour and fear of missing out. However, unlike toilet paper, fuel sits at the core of Australia’s economy. Transport, freight, agriculture, emergency services and mining are all highly fuel intensive, and substitutes are limited in the short term.

Australia’s fuel supply position is structurally weak. Reporting during the current crisis indicates that Australia holds around 36 days of petrol, 32 days of diesel, and 29 days of jet fuel, well below the International Energy Agency’s 90 day benchmark for member countries. Australia is also heavily reliant on imported refined fuels, with limited domestic refining capacity and long, exposed supply chains through Asia Pacific refineries and international shipping routes. Australia has only two domestic refineries still operating and receives more than 80 per cent of its petrol, diesel and jet fuel from overseas, mostly from South East Asia. Asia’s refining countries in turn get on average about 60 to 70 per cent of crude oil from the Middle East, mostly via the now closed Strait of Hormuz.

Importantly, governments and industry bodies have stated that total fuel supply volumes entering Australia have not collapsed. Tankers are still arriving, and aggregate national supply is broadly unchanged in the short term. The immediate problem has instead been a sharp, panic driven increase in demand, which has overwhelmed some distribution systems—particularly in regional areas—leading to localised outages and empty service stations.

Panic buying as a risk multiplier

In both episodes, panic buying did not merely respond to perceived risk; it actively created it. During COVID 19, the consequences were largely social and reputational—rationing, public frustration, and a sense of collective embarrassment. With fuel, the consequences are more tangible and economically significant.

Experts and ministers have been explicit that panic buying is currently the single largest threat to fuel availability, not an immediate lack of imports. Demand in some regions has reportedly doubled or tripled, draining local storage faster than it can be replenished through normal logistics channels. This creates a feedback loop similar to 2020, but with higher stakes: visible shortages prompt further stockpiling, which in turn deepens local supply disruptions.

Fuel shortages also propagate through the economy far more quickly than shortages of consumer goods. Diesel constraints affect freight costs, agricultural production, and food distribution, while sustained fuel price increases feed directly into inflation.

NineSquared’s freight expert, Phil Bullock, recently highlighted pre-existing challenges being experienced by the road freight industry in relation to increasing costs which are now being exacerbated by the war in the middle east. Current issues are expected to place further pressure on households and businesses already facing cost of living challenges. Supply chain lag effects and the likelihood that Asian refineries to prioritise domestic demand over exports suggest there will be continued pain for the Australian economy even after supply fuel chains start to recover.

Policy responses: short term stabilisation versus long term resilience

Australian governments have generally moved quickly in response to the petrol panic. Measures have included releasing fuel from emergency reserves, temporarily relaxing fuel standards to increase available supply, appointing a national fuel supply coordinator, and initiating investigations into potential price gouging and market conduct. Public messaging has also been more direct, explicitly linking panic buying to local shortages and urging consumers to buy only what they need. Governments already have legislation at their disposal that can be used to implement rationing measures if needed. Valuable lessons have also been learned from the pandemic how regulation can be applied to support the operation of key supply chains.

The recurrence of panic buying underlines a broader issue: Australia’s exposure to external shocks in essential supply chains. The toilet paper episode highlighted the fragility of retail inventory systems under stress. The current oil crisis highlights both the reliance of the Australian economy on fuel, and the vulnerability of supply chains to disruptions out of our control.

Policies to improve supply chain resilience

Governments are already looking at how they can help the freight industry decarbonise supply chains. Supply chain decarbonisation is a goal of the national Freight and Supply Chain Strategy and recognised in various jurisdictional freight plans. The current crisis suggests that opportunities to expand and accelerate action in these areas should be considered. However transitioning the road freight industry to other energy sources will also take time because there are limited alternatives for some parts of the industry. In a fuel constrained environment, rail freight can play an important role improving supply chain resilience. The current crisis underscores the importance of policies to help grow the volume of freight transported on rail.

The policy challenge is not simply to manage public behaviour in the moment, but to reduce the conditions under which rational anxiety about supply can take hold. That requires credible short term planning and a longer term approach to domestic resilience that goes beyond reassurance during crises. In that sense, the current queues at the bowser are less a repeat of 2020 than a warning that Australia has not fully absorbed the lessons of that earlier shock. The good news is that the policies that can improve supply chain reliance are already known – we just need to implement them more quickly.