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Highlights
- Prices of AdBlue have quadrupled and is a significant cause of concern for the logistics and supply chain.
- It has been estimated that Australia can run out of AdBlue supplies by mid-February.
The product that can wipe off Australia's logistics and supply chain, AdBlue, is facing price gouging. AdBlue is a small component that acts as a glue that ensures consumer products are delivered on time, and its prices have quadrupled. It has been estimated that Australia can run out of AdBlue supplies by mid-February.
What is AdBlue?
AdBlue is an anti-pollutant used in diesel cars and trucks to reduce harmful emissions. People with diesel cars must have observed a blue cap alongside the fuel tank, that the cap for the AdBlue, which is generally available at the auto retailers and service stations.
A significant increase in the AdBlue demand was observed, especially in Europe, as the fuel standards have become stringent. Moreover, injection of AdBlue has been made mandatory since 2011.
Let’s look into the potential reason for the surge in AdBlue prices.
What is causing a surge in the prices of AdBlue?
The prices of AdBlue are positively related to the costs of urea as it is a key ingredient of the diesel exhaust fluid. Presently, urea prices have increased as China has banned the export to Australia earlier this year. 80% of Australia’s urea is imported from China, which has been tightened up.
Demand and supply
The prices of AdBlue have increased by 400% within a few weeks, and bulk buying is the common phenomenon taking place at this time among truck drivers. With restricted supply and high demand, it is pretty evident that the prices of AdBlue will be affected.
Susan McDonald, Queensland-based National senator, has requested truck drivers not to stock AdBlue amid the price surge.
Is the Australian consumer watchdog investigating?
The Australian Competition and Consumer Commission (ACCC) is investigating whether the market of AdBlue is subject to price gouging or not.
However, ACCC commented on the situation and said:
Bottom Line
There is no solution with the government to control AdBlue prices as urea prices are on the rise and supply is in the control of China. ACCC has asked Aussies to contact them anonymously if they encounter price gouging.
