Amid escalating concerns over fuel supply, there is increasing pressure on the government to officially recognize a national fuel crisis and activate unprecedented emergency measures. This urgency stems from the ongoing conflict in the Middle East, which has led to significant fuel supply uncertainties.

The government is addressing these concerns through various initiatives—releasing 20% of the national fuel reserves, adjusting the standards for petrol and diesel, and establishing a new fuel taskforce. Additionally, the National Cabinet is slated to meet again next week to further discuss these issues.

Despite these efforts, over 400 fuel stations remain without at least one type of fuel, and diesel prices have soared above $3 in every major city except Darwin, prompting demands for more decisive action from the government.

James Paterson, the opposition’s spokesperson for defense, criticized Energy Minister Chris Bowen for not fully utilizing his powers to address the crisis. He accused Bowen of failing to take proactive steps and suggested the use of expansive emergency powers.

These powers would enable the energy minister to exercise direct oversight over the oil market, including implementing fuel rationing and directing fuel distribution as needed.

“These powers provide insight into supply and demand across the economy and grant significant leverage over energy firms, fuel distributors, and others to ensure that fuel reaches where it’s most needed,” Paterson stated in an interview with Sky News on Thursday.

It’s a sentiment echoed by One Nation MP Barnaby Joyce, who called on Bowen to “take control” and “pull the trigger” on the laws.

Bowen has repeatedly poured cold water on suggestions that the powers need to be invoked, arguing people were jumping “several stages ahead”.

“That’s a legitimate thing to ask me, but it’s not actually where we are or what we’re contemplating needing just right now, ” he told the 7AM podcast on Thursday.

Tony Wood, senior fellow of the Grattan Institute’s energy program, said it’s time the government communicated the severity of the situation and its next steps, including the emergency powers.

“It behoves the government, federal and state and territory governments, to be very clear on ‘this is where we’re at’,” Wood told SBS News.

“‘We don’t think we need to pull the trigger yet, but this is how we will do this, so that everybody knows what’s going on’”, is what governments should communicate, he said.

What is the Liquid Fuel Emergency Act?

The Liquid Fuel Emergency Act was passed in 1984 in response to the 1970s energy crisis, a period of high oil prices and shortages.

It grants the energy minister powers to respond to a national fuel crisis.

The threshold for the act is so high that it has not been triggered in four decades, even through two Gulf wars and the COVID-19 pandemic.

The governor-general must declare a national liquid fuel emergency, on the advice of the energy minister, that there is a serious shortage of fuel that requires government authority across supply, allocation and rationing.

The energy minister must feel confident that the crisis cannot be averted by increasing supply, having consulted with all state and territory energy ministers first.

This differs from the Fuel Security Act, which sets minimum stockholding obligations for importers and refiners.

What are the emergency fuel powers?

These are far-ranging powers that give the energy minister significant control over the oil market.

Under the legislation, Bowen could direct companies to maintain certain quantities of fuel at certain locations, direct the movement of fuel, direct refineries to produce specific types and quantities, or prohibit supply.

It would centralise federal control, overriding state or territory laws, and would allow him to designate both essential and bulk users.

Bowen has said it’s too soon to consider fuel rationing, arguing the government has several other measures at its disposal.

States and territories also have separate legislation granting their relevant minister powers with a lower threshold to control the distribution of fuel.

This includes the ability to direct producers, declare high-priority users, impose rationing restrictions or limit the quantity of fuel that can be purchased.

Wood says enacting the powers would be ideal, arguing it would stop inconsistency across the states and ensure a better buy-in from Australians.

“Ideally, the federal government should do this so we don’t have different states doing it differently,” he said.

“Australians will support the government on this, I believe, if they think the government’s doing A, what’s necessary and B, is doing it fairly.”

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