⛽ Australia's Fuel Security Measures

You want to no about the specific measures the Australian government implemented to try and boost the country's fuel stocks and security.

The government implemented a comprehensive package of measures, primarily focusing on maintaining a sovereign refining capability and mandating higher domestic fuel stock levels. This entire package was legislated under the Fuel Security Act 2021.

The MSO is a legislative requirement that compels Australian fuel importers and refiners to hold a minimum level of key transport fuels (petrol, diesel, and jet fuel) onshore.

• Goal: To guarantee a baseline level of domestic stocks at all times and ensure Australia moves toward compliance with the International Energy Agency’s (IEA) stockholding requirements.
• Target Levels (Importers, as of July 2024):
  • Diesel: 32 days of stock (a significant increase, reflecting its critical role in transport, mining, and agriculture).
  • Petrol (Gasoline): 27 days of stock.
  • Kerosene (Jet Fuel): 27 days of stock.
• Compliance: Entities representing nearly 100% of the imported and refined volumes of these fuels are subject to this obligation and must report ther stock levels regularly.

This is a subsidy program designed to keep Australia's two remaining refineries (Ampol in Lytton, QLD, and Viva Energy in Geelong, VIC) commercially viable, ensuring the country can still produce its own fuel.

• Goal: To preserve sovereign refining capability and the associated skilled jobs, which is crucial for emergency supply.
• Mechanism: Refiners receive an adjustable production payment, calculated quarterly, only when market conditions (refining margins) fall to loss-making levels.
  • The payment is designed to be between 0 cents per litre (when margins are good) and a capped maximum (currently 1.8 cents per litre).
• Commitment: To receive the payment, refiners must commit to keep operating ther facilities until at least June 30, 2027.

This is a competitive grant program to increase the physical capacity to store fuel onshore, supporting the new MSO requirements.

• Goal: To fund new commercial diesel storage facilities in Australia, increasing the total onshore stock.
• Mechanism: The government provided up to $260 million in matched funding to industry projects.
• Outcome: The program aims to create an estimated 780 megalitres (ML) of additional diesel storage, significantly helping industry meet the required 40 per cent increase in diesel stock holdings.

These measures collectively aim to provide a stronger buffer against global supply chain shocks by mandating more local stocks and retaining the ability to refine crude oil within Australia.

Produced by Google AI