HVIA attended the 11th meeting of the Transport Industry Fuel Security forum held this morning (May 27), with attendees told stock levels are holding up well, though pricing remains highly volatile.
The meeting was attended by Federal Minister for Infrastructure, Transport, Regional Development and Local Government Catherine King, who indicated meetings would continue fortnightly for the foreseeable future.
Overview
► Further shipments have been secured using the Government’s new Fuel Reserve Powers, including 660,000 barrels of jet fuel through a new agreement with China.
► The Government is continuing its scenario planning for Level 3 under the National Fuel Security Plan (taking targeted action including getting fuel to where it’s needed most and adopting practical measures to limit fuel use),but on current information there is no expectation we will move to Level 3, this is just good forward planning.
► Participants have been given until May 29 to provide additional information. Minister King did explain she had received a high-level summary and would be sharing that information with State and Territory Transport and Infrastructure Ministers this Friday.
Supply
► Stock levels are holding up well as per the Minimum Stockholding Obligation (MSO) data publicly available here.
► Supply still looks really good – domestic terminals are full and Australia’s lack of additional domestic storage means we are unlikely to see an increase in the MSO days then what is currently being reported.
► Normal oversight of global supply is about four-six weeks into the future – and there are normal levels of supply being reported.
► There remains a watch point though in terms of what happens with consumption levels in Europe as they hit their peak demand season. The EU has communicated that they believe there is sufficient stock to get them through this high demand season.
► The International Energy Agency (IEA) has reported that global demand has reduced by 6m barrels/per day – or 6 per cent – as price and government policies have taken affect.
►The IEA has done some research and interestingly there were 112 policies globally which had the effect of reducing oil use, but 139 policies that had been enacted to support consumers on price.
► Export Finance Australia’s underwriting of fuel was a gamechanger in terms of securing domestic supply.
► There is optimism and a quiet confidence in future supply, but the situation remains uncertain.
Pricing
► The situation is still unfolding day by day and it remains volatile. For example, the price of crude tumbled on Monday as peace negotiations seemed likely but by Tuesday had spiked again when that result did not eventuate.
► Prices have stabilised with the average price of diesel sitting at $2.31/litre and the average price of petrol at around $1.86/litre.
► Singapore jet fuel has been a good pricing indicator and is down 27 per cent from April but still higher than at the start of the conflict.
Industry Support
► The excise cut and suspension of the Road User Charge is not projected to continue past June 30, but is still under Treasury consideration, which is modelling different scenarios.
► Based on an action from the last meeting, a Fact Sheet is now available on how to access funding from the National Reconstruction Fund. Some anecdotal reports suggest a lot of people have been unable to access funding and those that have been approved have not seen payment yet. The Fact Sheet for transport operators is available here.
► HVIA is meeting senior representatives from the National Reconstruction Fund, Department of Infrastructure, Transport, Regional Development and Local Government, and Department of Industry, Science and Resources, on June 4 to discuss member eligibility for this fund.