Albanese Announces New Fuel Security Powers to Underwrite Imports
Prime Minister Anthony Albanese has unveiled forthcoming legislation designed to guarantee private sector purchases of fuel and fertiliser, while urging Australians to only 'take what they need' at petrol stations. This move comes in response to soaring diesel and petrol prices and widespread shortages, particularly in regional areas, exacerbated by the ongoing conflict in the Middle East.
Government Steps In to Mitigate Financial Risks
The Australian government will take on the financial risk of additional imports of essential products affected by the war, aiming to secure extra supplies of petrol, diesel, and fertiliser. Labor will introduce amendments to Australia's export finance laws on Monday, allowing the use of public funds to underwrite the purchase of additional shiploads of these critical items.
Anthony Albanese emphasized that this support is not business as usual, stating, "This support from the government will not be business as usual. It has to be additional supplies that are available on the international market." The new measures are intended to give private importers the confidence to secure extra supply by mitigating financial risks.
Voluntary Measures Preferred Over Mandates
While Albanese did not rule out enforcing working from home and fuel rationing if supply issues worsen, he expressed a strong preference for "voluntary arrangements" instead of "mandating from the top." He urged Australians to avoid panic buying, referencing photos of multiple jerry cans being filled up as not reflecting "the Australian way."
"I've said we need to learn the lessons of [the pandemic] now. I don't want things to be mandated," Albanese said. "This isn't toilet paper that's been piled up in some garages. It's actually fuel, and that's not sensible on a range of levels."
Current Fuel Supply and Government Actions
Energy Minister Chris Bowen provided an update on fuel levels, noting that as of Saturday, Australia had slightly increased its petrol supply to 39 days' worth, or 1.6 billion litres. Diesel levels remained flat at 30 days or 2.7 billion litres, with jet fuel at 30 days or 8 million litres. Of 81 fuel-carrying ships scheduled for April, six were cancelled but replaced by new orders.
Bowen explained that the government's decision to underwrite private companies is intended to "help companies make the decision to buy" additional fuel. Export Finance Australia will provide insurance, loans, and other financial arrangements to importers. "The fact of the matter is, cargo internationally is available, but it is getting increasingly expensive and increasingly risky in a volatile environment," Bowen stated.
Focus on Regional Australia and Independent Distributors
Earlier this month, Bowen cut fuel companies' minimum stock holding obligations, allowing them to release about 20% of their reserved supply into the domestic retail market. He promised this extra fuel would go to regional Australia, where demand is high due to agricultural activities. Albanese added that the additional fuel secured under the new powers could service "uncontracted demand" to assist independent distributors, who supply much of regional Australia.
Independent distributors, who buy petrol and diesel on the wholesale market without formal contracts with major companies, have reported struggles in getting enough fuel since the Iran war broke out. This has led to some service stations running low or dry. Just four companies—Viva Energy, Mobil, BP, and Ampol—supply about 85% of Australia's liquid fuels, according to the Australian Institute of Petroleum.
The government's proactive approach aims to ensure fuel security in the near-term while preparing for potential prolonged disruptions, emphasizing collaboration and voluntary measures over strict mandates.
