1 week ago
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Australia’s reserves of diesel and jet fuel will be boosted to 50 days of average use under a $10 billion funding package announced by the Albanese government, under a major policy shift that creates a 1 billion litre publicly owned stockpile, the first since World War II.
The 1 billion-litre fuel stockpile is set to cost $3.2 billion dollars and is a significant departure from the current fuel security policy that relies on privately owned fuel and storage facilities.
However, the new stockpile of diesel and jet fuel will be bought and owned by the government and held on the public’s behalf in private facilities around the country.
Prime Minister Anthony Albanese also announced a 10-day boost to the legally binding minimum stockholding obligation for diesel and aviation fuel, which will also be held in the storage facilities of private fuel companies.
“This is aimed at making sure that Australians can have more confidence in protecting our energy sovereignty, not just during this crisis, but going forward as well, protecting our nation’s energy interests.”
The announcement brings the stores of diesel and aviation fuel to around 50 days’ worth of average national use. Petrol will be boosted to about 40 days, under the federal government’s Minimum Stockholding Obligation.
Under the legislation, private companies are required to hold fuel that can be released in emergencies.
Diesel and aviation fuel, as well as fertiliser, are at most risk of shortages since the Iran war began, and are critical to the economy. Petrol, however, is still plentiful on the global market.
“Our fuel security reserve will focus on regional stock … and supply constraints for essential users in the event of another supply crisis,” Albanese said.
A further $7.5 billion for fuel and fertiliser security includes financial support for building extra storage and securing extra supply.
Australia imports about 90 per cent of its liquid fuels and Energy Minister Chris Bowen said the publicly owned diesel stockpile mirrors the policy of other fuel-importing nations.
“We’re a minority around the world. Twenty-two out of the 32 members of the International Energy Agency have a common national government-owned fuel reserve,” Bowen said.
The diesel reserve is aimed at helping with emergencies, like the localised outages at hundreds of service stations in early March when panic buying of fuel at the start of the Iran war drained service stations, Bowen said.
“If we had a government-owned reserve, which at the direction of the government, could be sent to those areas of shortage, like we had in regional NSW at the time, and areas of Western Australia and across the board in regional areas, that would have been very handy, and that’s what we’re building,” he said.
Motoring groups on Wednesday said the move to boost fuel stocks and set up a government-owned strategic reserve marked a “shift in strategy for the country”.
“But given the seriousness of the matter that we’d now seen first hand, it’s to be expected, and we welcome it,” National Roads and Motorists Association spokesman Peter Khoury said. The NRMA has been advocating for increased reserves for nearly two decades.
“The events ... since the war began have demonstrated the need for Australia to take fuel security seriously. That means increasing our storage capacity, and it means securing supply for the long term.”
Opposition Leader Angus Taylor says the government’s $10 billion fuel security package is “too little, too late”.
“[The Coalition wanted to] double the mandatory stockholding obligation. The government hasn’t done that. This is too little too late,” Taylor said.
Asked whether he supported the mandatory stockholding obligation being increased to 50 days – an increase of roughly 10 days – Taylor said Australia needed more fuel stocks.
“But we’ve said that the [obligation] should get to 60 days, and that’ll take the totals up towards the 90 days we want to see,” he said.
