The Reserve Bank of Australia (RBA) is concerned that rising energy costs will quickly feed through to consumer prices due to the stretched state of the domestic economy.
Sarah Hunter, RBA assistant governor, said higher oil prices mean higher costs and higher consumer prices in the near term, with pass-through expected to be faster and more extensive.
Some firms have already raised fuel surcharges, and construction companies are reviewing prices for new contracts, she noted.
Uncertainties remain, including the risk of prolonged oil price elevation due to the Iran war, with Brent crude above $110 a barrel.
