The Fuel for Thought study by the Future Fuels Forum says that would be the worst-case scenario if oil production does not keep up with increasing demand.

Petroleum engineer Phil Hart from the Australian Association for the Study of Peak Oil and Gas believes it will not be long before the demand for oil will outstrip supply.

“Oil production has been essentially flat since 2005, and we have only another couple of years at this same sort of level of production before we start seeing oil production going into decline,” he said.

Doctor John Wright from the CSIRO has told ABC’s AM program the study also suggests that such an oil shock would have a greater impact than a carbon emissions trading scheme.

“If we, for example, end up, as a result of an emissions trading scheme, [with the] price of carbon dioxide credit at something like $40 per tonne, which is probably reasonably likely, that would increase the price per litre of fuel by about 10 cents,” he said.