South Australia to create a strategic diesel reserve
Sydney (10 May)
The South Australian (SA) Government and fuel distributor IOR will store 10 million litres of diesel at a site in Port Bonython – near multiple industrial hubs – to support primary producers, SA’s government announced on 10 May.
The SA Government can choose to store up to 20 million litres of diesel at the reserve, Premier Peter Malinauskas said at a press conference.
“We [set] up this strategic reserve for the worst possible scenario that we’re preparing for. But as it stands right now, there is no indication that that day will come,” Malinauskas added.
SA’s government will not compete with the Federal Government or farmers to purchase fuel, Malinauskas said on social media. The reserve will instead help build confidence for primary producers, he added.
SA has become the third state to create a fuel reserve since the US-Israeli war in Iran began in late February. Western Australia’s government partnered with supplier Cambridge Gulf to set up a fuel reserve to support rural communities in mid-April. The Victorian Government then secured 10 million litres of diesel for agricultural producers on 6 May.
IOR welcomed Malinauskas’ decision as an example of industry and government working together. “We applaud the Premier’s approach to fuel security … [and look] forward to continuing to work with all levels of government as a trusted partner in strengthening fuel security,” the company’s CEO, Drew Morland, said.
IOR also plans to work with the Federal Government on fuel security projects. It has signed a Fuel Security Facility Agreement with Export Finance Australia (EFA), a government-owned lender, to import and distribute fuel with government support, it said.
EFA will help IOR manage price volatility and working capital risks under the deal, law firm Gilbert and Tobin (G&T) said on 7 April.
G&T’s statement came just one day after the Federal Government announced its Fuel and Fertiliser Security Facility scheme, as part of a wider A$10 billion budget commitment.
The Federal Government plans to finance up to A$7.5 billion of commodity purchases and storage projects through the facility, using loans, equity guarantees, insurance, and price support, multiple ministers said in a joint statement.
Australia has 42 days’ worth of petrol reserves, 35 days’ worth of diesel reserves, and 29 days’ worth of jet fuel reserves on 9 May, Energy Minister Chris Bowen said at a press conference. Ships carrying another 785 million litres of petrol, 450 million litres of jet fuel, and 2.3 billion litres of diesel are set to arrive in Australia over the next month, Bowen added.
By Avinash Govind