Australian Prime Minister Anthony Albanese has announced a package of more than A$10bn to expand domestic fuel stockpiles and create a government-owned reserve.
The package will increase onshore fuel holdings to at least 50 days of supply, up from around 30 days that is currently required of private companies, reported Reuters.
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Nearly 80% of Australia’s fuel is imported and the country has faced localised shortages following recent instability in the Middle East. The new reserve is expected to hold around one billion litres.
Albanese said: “The federal budget next week will include an Australian fuel security and resilience package.
“This is aimed at making sure Australians can have more confidence in protecting our energy sovereignty not just during this crisis but going forward as well, protecting our nation’s energy interests.”
The funding includes A$3.2bn for the government-owned reserve, which will focus on long-term diesel and aviation fuel storage, and A$7.5bn to support fuel and fertiliser supply and storage through loans, equity, guarantees, insurance and price support.
An uplift of ten days to the minimum stockholding obligation for refiners and importers adds A$34.7m in costs to support ongoing management.
Energy Minister Chris Bowen said Australia is among the few International Energy Agency member countries that do not maintain a government-held fuel reserve.
Bowen said: “We will now have a government-owned fuel reserve of around a billion litres to add to those minimum stocks that the private sector must hold. This is a big change in our approach as a country and a good one.”
The government will consult with industry and state authorities on how the reserve will be deployed. This includes options to underwrite or purchase fuel and support the expansion of refining and storage capacity.
Meanwhile, oil prices continued to fall, reaching their lowest levels in two weeks on 6 May after reports emerged of a potential truce between the US and Iran.
By 10:42 GMT, Brent crude futures had slid by 9.2%, or $10.07, to $99.80 a barrel (bbl), dipping under the $100 mark for the first time since 22 April. US West Texas Intermediate also dropped sharply, down by 10.6%, or $10.79, to $91.48/bbl, reported Reuters.
