in brief
- A government-owned fuel reserve will be set up, as well as a fuel and fertiliser security facility.
- The Opposition said it’s “too little, too late” as cost of living pressures sparked by the war in the Middle East bite.
The Australian federal government has unveiled a significant $10 billion initiative designed to enhance the nation’s fuel and fertiliser security.
On Wednesday, Prime Minister Anthony Albanese disclosed plans to invest $3.2 billion in a government-managed fuel reserve, which will stockpile 1 billion litres of diesel and aviation fuel.
To further strengthen fuel security, the minimum stock-holding requirement for suppliers will be extended by approximately 10 days, ensuring that Australia maintains at least a 50-day supply of all fuel types.
An additional $7.5 billion is earmarked for establishing a facility focused on fuel and fertiliser security, which will enhance supply and storage capabilities. This initiative includes financial backing through loans, equity, guarantees, and price support mechanisms.
The government will allocate $10 million towards feasibility studies aimed at exploring new and expanded fuel-refining capabilities.
Prime Minister Albanese emphasized the importance of this initiative, stating, “This is intended to assure Australians that we are committed to safeguarding our energy sovereignty, not just in response to the current crisis but also into the future, protecting our nation’s energy interests,” following a National Cabinet meeting.
Opposition leader Angus Taylor criticised the announcement, labelling it “too little, too late”.
Taylor said the nation’s fuel stocks needed a boost, but said the Coalition wanted the minimum stock-holding obligation at 60 days, which would take the totals up to 90 days.
“They’re not going that far, and that’s disappointing,” he said.
Energy Minister Chris Bowen said Australia was in the minority of International Energy Agency member states without a government-owned fuel reserve.
“We will now have a government-owned fuel reserve … to add to those minimum stocks that the private sector must hold, particularly focused on diesel and jet fuel,” he said.
The fuel could be channelled to address regional shortages and supply constraints for essential users in the event of another supply crisis.
It comes as the war in the Middle East, which has choked the movement of about a fifth of the world’s oil through the Strait of Hormuz, has put a spotlight on Australia’s energy security and reliance on fuel imports.
It has sent fuel and fertiliser prices soaring. Consumers have been given some relief through the government’s cutting of the fuel excise, but this measure is due to expire in June and the government has not confirmed an extension.
Australia now has greater stores than it did at the start of the war in Iran. The latest figures show that, if current consumption levels remained steady and no new supply entered Australia, the nation would have 43 days’ worth of petrol, 33 days of diesel and 28 days of jet fuel.
Wednesday’s announcement follows the establishment of the fuel task force in March to ensure a consistent supply across the nation after initial panic buying at the onset of the war.
The government also established new powers that allow it to take on the financial risk of importing additional fuel and fertiliser.
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