Over the last week, HVIA’s members have been seeking information on behalf of their customers regarding fuel supply. In response to HVIA’s advocacy, this morning Transport and Infrastructure Minister Catherine King called a roundtable of affected stakeholders and other related industry bodies.
Minister King and Minister for Climate Change and Energy Chris Bowen briefed industry representatives, stakeholders and interested parties on the current situation. It remains fluid as you can appreciate, but in the interests of trying to assist in the dissemination of helpful information, HVIA’s summary of this morning’s briefing is below:
> Fuel is continuing to arrive in Australia – 18 vessels have arrived in the last month and an expected 30-40 vessels are expected in the next month.
> The fuel importers and suppliers are comfortable in meeting their ongoing contractual obligations at this stage.
> Major customers or those on contracts are comfortable with approximately the next six weeks of supply, but beyond that there is ambiguity as the situation in the Middle East unfolds and access to the Strait of Hormuz is clarified.
> The pinch point in the market right now seems to be for the independent fuel retailers and suppliers of fuel that buy from the spot market. That supply has been severely compromised. This has led to rationing and localised shortages. HVIA has asked for additional information from the Department as to what the solution is for these suppliers and their customers. This message was reinforced and supported by the ATA.
> The Minimum Storage Obligations or Fuel Reserves are currently about 40 per cent over the legislated requirement for petrol, 21 per cent over for jet fuel, but is at or near the minimum supply level for diesel, which is Australia’s predominant fuel type.
> The Government does have emergency legislative powers to direct reserves etc to be prioritised and used but is reluctant to invoke those powers at this stage.
> Overnight, the International Energy Agency announced the release of 400 million barrels of oil that it has in reserve. This is the equivalent of 64 billion litres – the equivalent of Australia’s annual domestic supply. The timing and allocation of those reserves is now to be negotiated by the Australian Government but is expected to further strengthen supply.
> Fuel prices will continue to fluctuate and rise. There’s been a 43 cent per litre increase in the diesel price and that is excluding the increased costs of shipping and logistics.
The overall message to consumers from Minister Bowen was:
> At the macro level Australia’s fuel supply is stable.
> At the micro level there are localised shortages due to the spot market shortage and domestic consumption spiking.
> The ACCC has relaxed competition rules to enable fuel competitors to share information and coordinate more.
> Domestic market information will move from quarterly to weekly.
HVIA will continue to monitor and press for timely and accurate information. We have been stressing the need for continuity plans to be developed even though we hope those plans will not be required.
We will continue to seek more information about and impress the importance on supply being made available to all consumers – particularly those most affected currently.