Fuel crisis: Reserves bumped up to 46 days as national cabinet keeps watch on supply

Australia’s fuel reserves have been boosted by nearly a third compared to before the Iran conflict started, and petrol and diesel supplies are secured into June.

Leaders met again on Thursday to discuss the ongoing fuel crisis sparked by the near-closure of the Strait of Hormuz, with Prime Minister Anthony Albanese saying afterwards that the outlook remained secure in the near-term.

“However, we’re working hard to prepare for contingencies in the event of supply disruptions in fuel and in fertiliser,” he said.

Petrol reserves – which are supplies in storage beyond what is available for sale around the country – are sitting at 46 days now, compared with 36 days’ worth at the end of February.

Diesel reserves are at 31 days and aviation fuel 30 days.

Australia is diversifying its sources for fuel beyond traditional major suppliers in Singapore, Malaysia and Korea, all of whom are dependent on crude oil from the Middle East for refining.

The proportion of Australia’s fuel coming from the US has increased sixfold, up to 18 per cent of the current supply, and Argentina, which wasn’t among the top 20 sources last year, is into double digits.

“The key here is achieving supply. That is our top priority. The reality remains, of course, that the Strait is still closed and has been closed now for two months,” Mr Albanese said.

“We’re in deeply tumultuous and turbulent global times, and people are aware of that, and can see that that is the case. We are doing what we can to alleviate this issue.

“We’ll continue to do what we can to see if there are further cargoes that are available for purchase in the spot market.”

The national cabinet meeting came a day after the Prime Minister announced government underwriting had helped fuel suppliers secure an additional four shiploads of diesel fuel that would arrive in late May and early June.

There are now some 65 ships carrying oil, diesel, petrol and aviation fuel on their way to Australia.

Mr Albanese said any shift to the more severe stage three of the national fuel emergency plan was “certainly not imminent”.

“The trigger is very clear, which is supply. Now, at this stage, what we have is normal supply,” he said.

However, Mr Albanese rubbished reports the Government was in talks about reopening or building a new fuel refinery.

There are just two remaining refineries, one in Brisbane and one in Geelong, down from six in 2013.

The Prime Minister said he was open to discussion on “any constructive proposals” but at the moment the Government was focusing on immediate solutions, not things that would take a long time.

The country had been buffered from the full impact of the Middle East crisis by its distance, giving the Government time it should be using to prepare especially for a squeeze on diesel, according to a briefing note from Institute for Energy Economics and Financial Analysis chief executive Amandine Denis-Ryan.

She says Australia is one of the world’s highest per-capita users of diesel, but there are ways to mitigate the impact of the fuel crisis by making swift improvements to fuel efficiency in road transport.

“Australia’s location means it may feel the crisis for longer than other countries, but it is also buying the country time to prepare for a possible diesel squeeze. The government should not squander this opportunity,” she said.

As well as the federal efforts to secure fuel, States have been looking at ways to bolster supplies for their own populations.

WA Premier Roger Cook and Energy Minister Amber-Jade Sanderson announced on Thursday the State government would buy eight million litres of diesel from supplier Viva Energy that had been contracted to Rio Tinto but which the miner was relinquishing.

It will be added to the State’s stockpile and sold into areas of “acute need”, mainly regional areas and agricultural users in the Wheatbelt and Great Southern areas.

“It won’t cost the taxpayer, because we will on-sell that fuel at times when it is needed most into the market. This isn’t fuel that’s going to be given, this is fuel that will be made available to the market,” Ms Sanderson said.