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The fallout from Australia's urea shortage is escalating with a milk transporter revealing it has run out of the diesel additive needed for truck engines to start - sparking a warning that the cost of everyday supermarket items could soon rise.

Australia is now scrambling to secure alternative supplies to cope with China banning exports of highly refined urea, a vital ingredient in Australia's diesel fuel supply - allowing trucks to deliver everyday goods. 

Popular cheeses and flavoured milk could be in short supply by Christmas as trucks and top-selling cars are unable to move this summer.

Steven Ackfer, the founder and co-director of Motive Mechanical on the Gold Coast, predicted the shortage of AdBlue would cause the price of everyday groceries to rise.

'It's going to get really bad. Basically, it goes into everything,' he said in a TikTok video.

'We use it for cars, trucks, fertilisers, pretty much anything.

'So the cost of food's going to go up, the cost of maintenance is about to go up.'

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Steven Ackfer the founder and co-director of Motive Mechanical on the Gold Coast, predicted the shortage of AdBlue would cause the price of everyday items to rise and leave shelves bare (pictured, an empty Woolworths during lockdown)

Ben Nix, the chief financial officer of SRH Milk Haulage (semi-trailer, pictured), said they had no more AdBlue at their NSW depots, with wholesale urea prices surging since October

AdBlue, which is made from the fertiliser urea, is in short supply globally after China this year banned exports in a bid to contain food inflation.

Without this diesel exhaust fluid, designed to reduce nitric oxide pollution, half the trucks on Australian roads won't start, as many utes and four-wheel drives are kept off the road. 

The Ford Ranger ute - Australia's top selling car in September, October and November  - is only available as a diesel locally.

A shortage of AdBlue would also affect many tradies and families who rely on a Toyota HiLux ute.

Popular four-wheel drives like the Toyota LandCruiser and Toyota Prado are also commonly sold with a diesel, as are luxury SUVs like the Audi Q7 and the Mercedes-Benz M-Class.

The Ford Ranger ute - Australia's top selling car in September, October and November - is only available as a diesel locally - meaning it's vulnerable to a urea shortage

Ben Nix, the chief financial officer of SRH Milk Haulage, told Daily Mail Australia they already had no more AdBlue at their NSW depots, with wholesale urea prices surging since October. 

'The pricing has gone six times what we were paying just a couple of weeks ago,' he said.

'At some point, there will be something that runs out: the truck just won't start that day.'

Mr Nix said SRH Milk Haulage, which transports milk from farms to the factory, had run out of AdBlue in New South Wales, apart from what was left at service stations.

This crisis would threaten the supermarket and corner store supplies of Dairy Farmers milk, Parmalat dairy products like Oak flavoured milk, Saputo cheeses including Cheer, and milk from Norco, A2 and Richmond Dairies.

'We've got nothing in our depots in New South Wales -  we're sending trucks effectively to service stations to get it,' Mr Nix said.

'If the service stations start running low, which I'm going to guess they will in the not-too-distant future depending on who they get their supply from, that just creates uncertainty in the market.

'Hence, everyone's increasing their prices. You just don't know what's going on.

'Effectively, it's just every man and their dog.'

Mr Nix said while AdBlue supplies were sufficient in Victoria and Western Australia, in NSW they were unable to bulk buy any supplies.

'We have had suppliers advise that we'll get some in two weeks - obviously, they're a new supplier so there's uncertainty around whether they are actually going to deliver what they say they're going to deliver,' he said.

The fallout from Australia's urea shortage is escalating with a milk transporter revealing it has run out of the diesel additive needed for truck engines to start - sparking a warning from a mechanic (pictured is a2 milk which the SRH Milk Haulage company transports)

This crisis would threaten the supermarket supplies of Dairy Farmers milk, Parmalat dairy products like Oak flavoured milk, Saputo cheeses including Cheer (pictured), and milk from Norco, A2 and Richmond

Mr Nix said SRH Milk Haulage, which transports milk from farms to the factory, had run out of AdBlue in New South Wales, apart from what was left at service stations

'We've got a supply crisis going on.'

This has seen a global scramble for alternative supplies of the diesel exhaust fluid from other urea-producing nations like Indonesia, Saudi Arabia and Qatar.

Trade Minister Dan Tehan on Monday called on transport companies to avoid hoarding AdBlue but he insisted there was no crisis because Australia could import alternative supplies.

'There will always be some stock which they keep in warehouses,' he told ABC radio on Monday.

'But what we don't want to see is the excessive warehousing of AdBlue at this stage.'

Mr Ackfer said Penrite, an industrial lubricant company, had told him they had no choice but to put up AdBlue prices.  

'They said the price of urea has gone up 150 per cent in the last two weeks and oil, wholesale and retail prices,' he said.

'There's no cap to them going up.

'It's going to go up exponentially if we don't get another urea supply. 

'Look out, here we go.' 

Mr Tehan has hinted Australia would buy AdBlue supplies from Indonesia, almost a week after South Korea signed a deal with Indonesia to buy 120,000 tonnes a year for three years.

'There is obviously issues around containers, shipping disruptions which we're also working through,' he said.

Mechanic Steven Ackfer (pictured) fears a surge in food prices as transport companies struggle to find a diesel additive needed for truck engines to start

Popular four-wheel drives like the Toyota LandCruiser (new model, pictured) and Toyota Prado are also commonly sold with a diesel

'But from everything that we're seeing, there is clear supply which we can bring to Australia.'

Mr Tehan announced the approach to Indonesia as South Korean President Moon Jae-In met with Australian Prime Minister Scott Morrison in Canberra.

Australia is also approaching Saudi Arabia, the United Arab Emirates, Qatar and Japan for urea supplies.

Incitec Pivot, Australia's only manufacturer of AdBlue, supplies 10 per cent of the domestic market.

Trade Minister Dan Tehan on Monday called on transport companies to avoid hoarding AdBlue but he insisted there was no crisis because Australia could import alternative supplies

But in November, it announced that from December 2022, it would cease making the product at its Gibson Island plant in Brisbane, with chief executive Jeanne Johns blaming a failure to secure a gas supply deal.

The company, listed on the Australian Securities Exchange, released a statement on Friday promising to boost production next year before the plant closed.

'We are fully committed to supplying our domestic customers' requirements and are currently investigating ways we can increase manufacturing capacity of the urea used to make AdBlue solution over the next few months,' it said.

'We are working closely with our customers and keeping them updated.' 

Kiwi industrial logistics company DGL distributes AdBlue imported from New Zealand in Australia and has the biggest market share.

But China still supplies 80 per cent of the Asia-Pacific.

Energy Minister Angus Taylor last week admitted Australia's existing supplies of urea would only last for another five weeks, or until mid-January. 

Imports on their way to Australia would add another two weeks ' worth of supply, which would see AdBlue run out by the beginning of February.

Australia is now scrambling to secure alternative supplies to cope with China banning exports of highly refined urea, a vital ingredient in Australia's diesel fuel supply - allowing trucks to deliver everyday goods (pictured, AdBlue being poured into an Audi AG A5)