“There is no need to panic-buy petrol.”

Those words from the treasurer, Jim Chalmers, on Wednesday were a bid to reassure Australians that the US-Israeli war on Iran did not mean our nation was about to run out of fuel.

There has been some breathless reporting of Costco service stations running out of petrol, and long lines at other servos as motorists rush to fill up before the anticipated price rises.

Three days after the start of missile strikes on one of the world’s biggest oil producers, Chris Bowen, the energy minister, on Tuesday suggested that the only thing to fear was fear itself.

“There are real challenges, but there is no need for panic-buying; that will just make the situation worse,” Bowen said, in advice reminiscent of the Covid toilet paper shortages.

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While there is no such thing as an official toilet paper stockpile, Australia does maintain a strategic reserve of petroleum products.

So what is this reserve, and is it enough? How worried should we be?

What’s going on?

The ongoing attacks on Iran, alongside retaliatory attacks, have essentially closed the strait of Hormuz, restricting one-fifth of the world’s seaborne crude oil supply, and sending energy commodity prices soaring.

Expensive oil is bad news for motorists as it will make petrol more expensive. But price is one thing – availability is another.

Australia imports about 90% of its liquid fuel including petrol, diesel and aviation fuel.

Most of those products come from refineries in Singapore, South Korea, and Japan. They, in turn, rely on Middle Eastern crude oil.

The number of Australian oil refineries has dwindled over the years from 12 to just two today – both of which are propped up by government support.

There were six refineries at the start of the Coalition’s most recent decade in power, and two by the time Labor was elected in May 2022. (Two refineries closed during opposition leader Angus Taylor’s tenure as energy minister).

That reflects the choice under governments of both persuasions to not intervene as locally refined products were replaced by cheaper – much cheaper – imported fuels.

But in the current world where every country is focused on economic security, our overwhelming reliance on overseas fuel now appears a glaring vulnerability.

Are we about to run out of fuel?

There’s no clear and present threat that petroleum and oil imports are about to dry up.

A 2020 federal government liquid fuel security review – released under freedom of information in early 2024 – examined a scenario where the strait of Hormuz was closed.

It concluded that “fuel supplies in Australia are unlikely to be physically affected as long as the disruption is resolved within six months and IEA [International Energy Agency] countries release emergency stocks to maintain global supplies”.

And even if oil shipments out of the Middle East were disrupted beyond that time frame, Australia would still be able to secure what we needed as long as we were prepared to pay, the review said.

That assessment may or may not be true, but it suggests we are a long way from finding out.

What fuel stockpiles do we have?

Since 2023, importers and refiners have been required to maintain a baseline level of fuel stocks across petrol, diesel and jet fuel as part of Australia’s long-term fuel security framework.

This minimum stockholding obligation is set out in law: petrol refiners need to maintain reserves of at least equivalent to 24 days of usual demand, and 27 days for importers. The minimum for refiners of diesel is 20 days’ worth of supply, and 32 days’ worth for importers.

The businesses need to report their holdings weekly, and Department of Climate Change, Energy, the Environment and Water (DCCEEW) reports average stockholding data on a quarterly basis.

“Australia’s refineries and companies are required to keep a stock of fuel on hand in Australia just for this type of eventuality,” Bowen said.

“And I’m pleased to say that we [have] 36 days’ worth of petrol, 34 days’ worth of diesel, and 32 days’ worth of jet fuel on hand as we speak.”

Separate DCCEEW petroleum statistics tracking fuel reserves go back to 2010.

These figures show that as at the end of last year, we had enough petrol reserves to cover 26 days of usual demand, diesel stocks to cover 25 days of consumption, and 20 days’ worth of jet fuel.

(There’s also a second debate about whether we are meeting an obligation to hold fuel stocks equivalent to 90 days of imports as per an agreement with the International Energy Agency. The answer is: we never have.)

So if Australia was totally cut off from the world today, and assuming we just kept burning at the same rate, we could last until early April before running out of fuel.

Will that be enough fuel?

The first thing to say, again, is that nobody is talking about a complete stop to international supply lines. It would take something like a regional conflict that shut down all shipping to Australia – not impossible, but not what we are talking about today.

So taking a bigger-picture view, are our stockpiles big enough?

Tony Wood, a senior fellow at the Grattan Institute’s energy and climate change program, says there’s no obvious answer to how much we need to be holding in strategic reserve.

The cost of stockpiling – the cost of insurance, essentially – is high, and both sides of politics have struggled with the question.

“Clearly the geopolitical situation is less stable now than it was, and if the risks are increasing, it makes sense to take out more insurance,” Wood said.

“This is a decision both sides had avoided. At least you’d think now’s the time to think carefully about whether 35 days of reserves is enough.”

• Patrick Commins is Guardian Australia’s economics editor