Australia eyes A$10 billion for fuel reserve after supply scare

[SYDNEY] Australia will include an A$10 billion (S$9.2 billion) package for fuel security and resilience in next week’s Budget proposal after the Iran war caused a run on supplies in the Pacific nation.

The package will help build out reserves of fuel and fertiliser, including supporting an expansion of overall storage to 50 days of supply for diesel and jet fuel, Prime Minister Anthony Albanese said in a speech in Sydney on Wednesday (May 6). The government itself will own a reserve of about one billion litres of fuel, he said.

Despite being a major producer and exporter of energy, Australia sources the vast majority of its refined fuels from overseas and holds among the lowest stockpiles in the developed world. That left it exposed when the Iran war disrupted global oil supplies, contributing to widespread fuel shortages and rising prices.

Albanese and Energy Minister Chris Bowen spoke about the plan on Wednesday after a national security meeting in Sydney. Bowen said Australia has responded to the crisis, and has more fuel today than when the bombings in Iran began.

“This is a big change in our approach as a country,” Bowen said. “We have been looking at how to be better prepared for future shocks.”

There’s at least one “serious proposal” for an additional refinery that would receive the support of the state and federal government, Albanese said. The nation only has two working refineries, one of which suffered an explosion last month. BLOOMBERG