Prime Minister Anthony Albanese has revealed next week’s Federal Budget will provide more than $10 billion to boost fuel security, including establishing a permanent government-owned fuel security reserve of around one billion litres and lifting the Minimum Stockholding Obligation by approximately 10 days for every type of fuel to circa 50 days.
He announced the suite of measures on Wednesday morning after a national cabinet meeting with state and territory leaders to discuss the fuel crisis.
The PM says the package is aimed at “making sure that Australians can have more confidence in protecting our energy sovereignty, not just during this crisis, but going forward as well, protecting our nation’s energy interests.
“This will support an overall expansion of Australia’s onshore fuel reserves to ensure at least 50 days of fuel supply and storage of diesel and aviation fuel.”
As part of the Government’s plan to deliver energy sovereignty, the Australian fuel security and resilience package will comprise the following elements:
> $7.5 billion for the establishment of a fuel and fertiliser security facility to increase supply and storage of fuel and fertiliser by providing financial support including loans, equity guarantees, insurance and price support.
> $3.2 billion to establish a government-owned Australian fuel security reserve of around one billion litres to increase long-term diesel and aviation fuel supply and storage in combination with an increase to the Minimum Stockholding Obligation to increase Australia’s critical fuel reserves to 50 days. “Now, our fuel security reserve will focus on regional stock outs and supply constraints for essential users in the event of another supply crisis,” Albanese says.
> $10 million to support feasibility studies into newer, expanded fuel refining capabilities to be co-funded with state and territory jurisdictions. He notes that, “We know there’s at least one of a serious proposal that will receive the support of a state government and Federal Government to examine the possibility of additional refining capability going forward as well”.
“And we want to make sure that there’s buy-in, which is why any proposals will be jointly funded by state and territory governments as well as the Commonwealth.”
Energy and Climate Change Minister Chris Bowen points out that Australia is in a minority of countries in the International Energy Agency membership which don’t have a government-owned fuel reserve.
“This is a big change in our approach as a country and a good one, building on the increase in the Minimum Stock Obligations that we’re requiring the private sector to hold 10 days and adding more so that we would have 50 days’ worth of diesel and 50 days’ worth of changes jet fuel, which is an appropriate level,” he says.