Fuel companies risk huge fines as supply crisis deepens

While the bill applies across all areas of business, the government says it will help consumers get a fair go as petrol and diesel prices skyrocket on the back of the war in the Middle East.

The changes would help tackle price gouging at its source by cracking down on unfair cost increases, illegal contract terms and anti-competitive behaviour, Treasurer Jim Chalmers said.

"Our message to petrol retailers has been very clear: you are on notice,'' he said.

"Do not use this conflict to take advantage of Australians."

Opposition energy spokesman Dan Tehan responded positively to the legislation but said it still had to go through party room processes.

Hundreds of fuel stations are without fuel as consumers rush to bowsers.

In Victoria, 115 service stations have no petrol and 92 have no diesel, while in New South Wales 51 are without petrol and 164 without diesel.

Updated figures for other states were not immediately available.

The proposed introduction of the tougher fines follows revelations that officials had drawn up plans in 2019 to cap fuel bills at the petrol pump to counter potential critical shortages.

The war in the Middle East has sent petrol, diesel and jet fuel prices skyrocketing, causing chaos for travellers as the cost of flying soars and some services are cancelled.

A surge in motorists stocking up has led to hundreds of service stations running dry.

A national fuel emergency response manual suggests a daily transaction limit, which could be set by the federal energy minister.

At current prices, the $40 cap equates to around 16 litres.

Such a limit was not being considered, ministers said on Wednesday.

"The government has no intention of applying caps to the consumption of petrol," Trade Minister Don Farrell told reporters in Canberra.

The manual was obtained by former independent senator Rex Patrick under freedom of information laws.

"The government is already using a number of approaches suggested in the manual," he told AAP.

"I don't think they are necessarily prescriptive ... for example the $40 purchase cap may well be adjusted to some other number."

Any rationing of petrol must be fair and transparent, while helping constrain demand, the document reads.

It also outlines other measures the government could take, including directing fuel to be delivered to areas of shortage or essential users, ordering petrol companies to maintain minimum stocks, transferring fuel between states and territories and directing refineries to produce quantities of petrol or diesel.

Some of those steps have already been taken since the Iran conflict escalated.

Soaring oil prices are also throwing travel plans into disarray, with Jetstar confirming it has cut back on flights due to rising jet fuel prices and other costs.

One in 10 of the budget carrier's May services have been impacted, including domestic New Zealand services and flights between Auckland and Sydney and Brisbane, a spokeswoman said.

Most affected passengers have been offered seats on same-day Jetstar flights.

The government needed to be more transparent about its response to soaring fuel prices, shadow attorney-general Michaelia Cash told Seven's Sunrise program.

"Apparently they understand that people are doing it tough, but they are doing nothing to alleviate that pain," she said.