Australia commits A$10 billion to fuel, fertiliser security
Sydney (6 May)
The Australian Government will allocate over A$10 billion to fuel and fertiliser supply schemes – including a permanent state-owned fuel reserve – as part of its upcoming 2026-27 Budget, Prime Minister Anthony Albanese said on 6 May.
Australia’s government plans to finance up to A$7.5 billion of commodity purchases and storage projects through a Fuel and Fertiliser Security Facility, multiple ministers said in a joint statement. It will finance projects through loans, equity guarantees, insurance, and price support, they added.
The facility builds on the Government’s existing underwriting scheme, which it introduced in April. Australia’s government agreed to work with importers CSBP and Incitec Pivot to underwrite fertilisers on 22 April, Agriculture Minister Julie Collins said at the time.
It has also underwritten 450 million litres of diesel purchases and 100 million litres of jet fuel purchases since mid-April, Albanese said on 1 May.
The Australian Government will allocate another A$3.2 billion to create a state-owned, one-billion-litre diesel and jet fuel reserve to support regional communities and essential users, multiple ministers said today.
The reserve brings Australia in line with other International Energy Agency members, Energy Minister Chris Bowen said at a press conference. “We are a minority around the world. 22 out of 32 members of the International Energy Agency have a national government-owned fuel reserve,” Bowen said.
Western Australia’s government partnered with fuel supplier Cambridge Gulf Limited to create a state-owned fuel stockpile on 14 April. Cambridge Gulf has agreed to store up to 12 million litres of government-owned fuel at a facility in Kimberley to support remote communities and businesses.
Most of Australia’s fuel reserves are currently held by private companies under the government’s Minimum Stockholding Obligation (MSO) scheme. Fuel companies currently need to hold 20 – 32 days’ worth of diesel and 24 – 27 days’ worth of petrol and jet fuel under the MSO.
But the Government plans to increase MSO obligations by about 10 days’ worth of fuel for each fuel type – in addition to creating the public reserve – Albanese said.
Australia had 43 days of gasoline reserves, 28 days of jet fuel reserves, and 33 days of diesel reserves on 28 April, data from the Department of Climate Change, Energy, the Environment, and Water show.
Australia received 92 shipments of fuel in April, more than in any other month this year, Energy Minister Chris Bowen said. Australia has more fuel in the country than it did before the US-Israeli war in Iran began, Bowen added.
Australia imported fuel from traditional trade partners – like South Korea and Singapore – and new ones like the Netherlands, Algeria, and the Americas, Prime Minister Albanese said.
Australia’s government is also working on expanding the country’s fuel refining capacity. It will allocate A$10 million to co-fund feasibility studies for refining projects with state governments, Albanese said.
“We know there’s at least one serious proposal that will receive the support of a state government and [the] Federal Government to examine the possibility of additional refining capability going forward as well,” Albanese added.
One of Australia’s two operational refineries, Viva Energy’s Geelong plant, is operating at 80% of its jet fuel and diesel capacity, and 60% of its petrol capacity, because of a 15 April fire.
By Avinash Govind