With the price of fuel still rising steeply and shortages appearing across the country, what can we learn from how Australia fared during previous fuel crises?

In the quarter century after the second world war, cheap oil was one of the foundations of global economic stability. This changed suddenly in October 1973 when the global price of oil rose dramatically. The 1970s oil shock had its origins in the 1973 Yom Kippur war between Israel and its Arab adversaries. When western countries supported Israel, the Organization of Arab Petroleum Exporting Countries (OAPEC) reduced oil production and suspended deliveries to the US, the Netherlands and Portugal.

The Arab oil embargo was lifted in March 1974, but its consequences lasted more than a decade. In Australia, it led to a three-year hiatus in the mining boom that had begun in 1960. It also led to the end of two decades of low unemployment and low inflation that had characterised the golden age of capitalism in the western world.

Australia, along with most other western countries, experienced “stagflation”, a period of simultaneously high unemployment and inflation. Fuel prices jumped by 25% and inflation peaked at nearly 18%. Later in the decade, the rate of inflation still........

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