As fears over fuel supply ripple through Australia, UNSW Business School experts say panic buying is driven as much by instinct and expectations as by actual shortages.
When uncertainty rises, so does the urge to act.
Panic buying has re-emerged across Australia as global tensions in the Middle East raise concerns about global and fuel supply chains, leading to long queues and spikes in demand at petrol stations. While similar behaviour was seen during the COVID-19 pandemic, UNSW Business School experts say the current wave is being driven more by perception and expectation than actual shortages.
“Anytime there is fear and uncertainty, those emotions bring out more risk-avoidant behaviour in people,” says Professor Nitika Garg from the School of Marketing at UNSW Business School. “That often leads people to stock up or act early, because they are trying to protect themselves from what might happen next.”
But panic buying is not simply irrational behaviour. According to UNSW economists and consumer psychologists, it is often a predictable response to fear, price volatility, and the belief that others are about to do the same.
Why Australians are especially sensitive to panic buying
Dr Timothy Neal, Senior Lecturer in the School of Economics at UNSW Business School, has studied panic buying at scale. During the COVID-19 pandemic, he and research co-author Professor Michael Keane, UNSW Business School, analysed Google search data across 54 countries, tracking spikes in searches for terms such as “toilet paper”, “panic buying” and “supermarket near me”.
These searches were used to build a real-time “panic index” that showed when concern was rising and how quickly it translated into consumer behaviour. The research, published in the Journal of Econometrics in January 2021, showed significant differences between countries, with Australia standing out for both the speed and intensity of its response.
“Australia is notable for the incredible speed and scale with which panic took hold in early March 2020,” the paper found, with search activity linked to panic buying rising more sharply than in almost any other country in the sample.
Dr Neal says the sensitivity is likely linked to how closely Australians monitor global events and understand their local impact.
“We’re a highly globalised country, and people understand that what happens elsewhere in the world can affect us here,” he says.
Australia sits at the end of a long, fragile fuel supply chain that starts in the Middle East. “We rely on diesel and petrol that comes from Asia, and Asia relies on crude oil shipments from the Middle East,” Dr Neal says. “So, there’s a clear link between what’s happening in the Persian Gulf and what we expect to happen at petrol stations in Australia.”
His research shows consumers are highly responsive to signals about what might happen next, not just what is happening now.
“People consume the news, but how they connect that to their consumer behaviour often depends on interpretation or analysis from others,” he says. “In that case, the media and/or social media play a very large role.”
Why fear spreads so fast
Panic buying spreads because people respond not just to the event itself, but to each other’s behaviour. Any period of fear and uncertainty tends to trigger more risk-averse behaviour, says Prof. Garg.
“People are doing this because they don’t know what’s happening,” she says. “They don’t know how the whole thing is going to play out, and so given that uncertainty, they just try to protect themselves from it.”
Once consumers see others stocking up, whether in person or online, the behaviour can escalate quickly. “That whole fear of missing out, people start thinking, ‘Oh, this person did it,’ and before you know it, the whole thing has escalated,” she says.
Social media can accelerate this cycle, turning isolated actions into signals that prompt others to act. Prof. Garg says that while panic buying is often framed as irrational, it can feel logical in the moment, particularly when the product is seen as essential.
“The more essential a commodity is perceived to be, from the consumer perspective, the more fearful they will be,” she says. Fuel, she adds, carries a particular weight because it is tied to daily life.
Fuel panic is also about price, not just supply
Dr Neal says there are two different motivations behind panic buying. “If you think you might not be able to buy the goods you need next week, you’ll buy more this week,” he says. “But the second motivation is about price. If you expect the price to go up, you’re incentivised to stock up now.”
In the case of fuel, the second trigger is especially powerful because price changes are immediate and highly visible. “We are seeing its impact in the prices that we are seeing at our gas station,” says Prof. Garg. “So, everyone is sort of clued into that.”
Can panic buying be stopped?
Experts say that there is no silver bullet once panic buying begins. Prof. Garg says clear and early communication from the government is critical to reducing fear.
“Communication, saying that there are no short-term shortages, would help,” she says.
She adds that monitoring fuel pricing is also important to avoid worsening public concern. “I think greater monitoring so that the retailers are not price gouging and just adding to this frenzy would be helpful,” she says.
Dr Neal says the challenge runs deeper than messaging alone. “All that you need for panic buying to be rational is to believe that other people are going to be panicking,” he says. “You don’t even need to be panicking yourself; other people's consumption behaviour can single-handedly cause shortages.”
That makes the behaviour difficult to contain once it starts. While measures such as rationing can limit the impact, they are often difficult to implement in practice. Both experts say panic buying can deepen the disruption people are trying to avoid.
“I think our experience with COVID has primed us to be especially sensitive to panic buying in the future,” Dr Neal says.
“That does not mean every fear of shortage is unfounded. Fuel is part of a global supply chain, and prolonged instability can flow through to transport, freight and the price of everyday goods.”
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