Fears of service stations running dry are a distant memory and petrol prices are back under the $2 a litre mark following government efforts to secure additional supplies to Australia.
But the oil shock has not gone away and the ongoing blockade of the Strait of Hormuz shows no sign of ending soon.
Countries continue to run down stockpiles, which have been keeping a lid on prices, with about 9.5 per cent of global oil demand disrupted, according to CBA commodities analyst Vivek Dhar.
Fresh forecasts released by the RBA on Tuesday showed a dire outlook for inflation and economic activity, even with relatively benign assumptions that the benchmark oil price will fall to $US82 a barrel by the end of the year, from just under $US110 currently.
Even the worst-case scenario produced by the RBA are less pessimistic than oil price assumptions recently produced by the European Central Bank.
Using the ECB's severe scenario, in which 60 per cent of oil transiting the Strait is disrupted and the oil price hits $US145 a barrel in the second quarter, NAB analysts Vince Carse and Jessie Cameron modelled wholesale diesel prices shooting above $4 a litre in Australia.
The wholesale, or terminal gate price, for diesel was about $2.25 a litre in Sydney, according to the Australian Institute of Petroleum, about 20c cheaper than the retail price.
Diesel prices previously peaked during the current crisis under $3.30 a litre in early April.
Such a large spike in the diesel price would have a significant impact on prices across the economy, given it is a major input cost in agriculture, mining and transport industries.
While the severe scenario was not NAB's base case forecast, senior economist Taylor Nugent said it was a real risk.
"The input shocks of a price spike this size would be very difficult for businesses to absorb," he told AAP.
If borne out, inflation would likely shoot above the forecast peak of 5.2 per cent in the RBA's adverse scenario.
Following the RBA's decision to lift the cash rate to 4.35 per cent on Tuesday, economists were divided on whether the central bank would follow it up with more hikes or enter a prolonged pause.
Economists at NAB joined Westpac were forecasting another hike in June but Commonwealth Bank and ANZ Bank continued to predict a pause from here on out.
HSBC's local chief economist Paul Bloxham said the three hikes since February allowed the RBA to enter "wait and see" mode.
But the bank could be forced to act more decisively if the treasurer unveils higher spending in the May 12 budget than expected.
"A key risk to our view is that the federal budget is more expansionary than we have been assuming and that this could force the RBA to have to hike further," Mr Bloxham said.
Governor Michele Bullock said government handouts, like a rumoured tax offset or a cut to the fuel excise, add to demand, which the RBA was trying to dampen as part of its fight against inflation.
Deloitte Access Economics partner Stephen Smith said governments needed to work in better alignment with the central bank to bring inflation under control.
Federal Treasurer Jim Chalmers said the budget would be one of the most responsible seen in very long time.
"We intend to play a helpful role in the fight against inflation in this budget," he told reporters on Wednesday.
