The Federal Government has launched an urgent review into the country’s liquid fuel security after a report revealed Australia has the lowest reserves in the world.
The Parliamentary Joint Committee on Intelligence and Security (PJCIS) report has revealed Australia has less than 50 days of reserves.
“There are identified supply-chain vulnerabilities in the fuel sector in Australia and the committee is concerned that these risks are actively managed in the most appropriate manner,” the report said.
“In particular, the committee considers there is a serious requirement to assess these vulnerabilities, and test the effectiveness of any existing or potential risk mitigations, particularly in scenarios of heightened geo-political tensions.
“The committee notes the need to examine Australia’s security of fuel supply and dependence upon fuel from a national perspective, involving collaborative efforts between governments and industry.”
The country has just 49.6 days of net coverage, which is well below the 90-day supply Australia and other nations agreed to store under an agreement with the International Energy Agency (IEA).
“The Turnbull Government will assess Australia’s liquid fuel security to help deliver affordable and reliable energy,” Energy Minister Josh Frydenberg said.
“Liquid fuel, such as petrol, diesel and jet fuel, accounts for 37 per cent of Australia’s energy use, including 98 per cent of transport needs.
“Over the past two years, we have been focused on securing reliable and affordable electricity and gas.
“It is time now to consider Australia’s liquid fuel security.”
The minister said the assessment is the “prudent and proper thing to do” and should not be construed as Australia having a fuel security problem.
“The comprehensive assessment will look at how fuel is supplied and used in Australia, including our resilience to withstand disruptions both overseas and in Australia,” he said.
“We have not experienced a significant disruption to fuels supplies since the OPEC oil crises in the 1970s, but there is no room to be complacent.
“Australia’s liquid fuel supply increasingly depends on overseas sources and relies on market forces to maintain reliability and affordability.”
Mr Frydenberg said the review will be completed by the end of 2018 and contribute to a broader consideration of energy security across liquid fuel, electricity and gas supplies in the National Energy Security Assessment by mid-2019.