The federal government has announced it is taking action to secure Australia’s long-term fuel supply, keep prices low for consumers and create over 1000 new jobs with a $211 million investment in building new domestic fuel storage and backing local refineries to stay open wherever commercially possible.
As part of its 2020-21 Budget, the government says it’s aiming to enhance Australia’s fuel security and bolster local industry through a $211 million investment in new domestic diesel storage facilities, reforms to create a minimum onshore stockholding, and measures to support local refineries.
This will be delivered through a combined market and regulatory framework, with three key elements:
- Investing $200 million in a competitive grants program to build an additional 780ML of onshore diesel storage
- Creating a minimum stockholding obligation for key transport fuels; and
- Backing the refining sector by entering into a detailed market design process for a refinery production payment.
Prime Minister Scott Morrison said Australia’s fuel security was essential for our national security.
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“Our positive changes to the fuel market will ensure Australian families and businesses can access the fuel they need, when they need it, for the lowest possible price,” the Prime Minister said.
“Fuel security underpins our entire economy. Not only does it keep Australia moving, the industry supports thousands of people across the country and this plan is also about helping keep them in work.
“Like all sectors of the economy, the COVID-19 pandemic is having an impact on Australia’s fuel industry. The events of 2020 have reminded us that we cannot be complacent. We need a sovereign fuel supply to shield us from potential shocks in the future.”
Minister for Energy and Emissions Reduction Angus Taylor said the government recognised that Australian refineries are under significant financial pressure and is committed to working with the domestic fuel sector to ensure it has a long-term future.
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“Almost all Australians are reliant on fuel and it is the lifeblood of so many sectors in our economy. Our farmers and miners rely heavily on diesel to do their jobs and provide services, while the transport sector sources 98 per cent of its energy from liquid fuels,” Minister Taylor said.
“That’s why it is critical that Australia has control over its fuel security arrangements and the Government is making sure of that.”
The construction of diesel storage will not only secure diesel supplies, but will support up to 950 jobs, along with 75 new ongoing jobs, many in regional areas.
A minimum stockholding obligation will act as a safety net for petrol and jet fuel stocks, and increasing diesel stockholdings by 40 per cent.
The Government will work with industry over the next six months on the legislative and regulatory design of the domestic fuel package.