Albanese Unveils New Fuel Security Powers to Underwrite Private Sector Imports
Prime Minister Anthony Albanese announced on Saturday that the Australian government will introduce legislation to guarantee private sector purchases of fuel and fertiliser, aiming to bolster national supply security amid ongoing global tensions. The move comes after a month of soaring diesel and petrol prices and widespread shortages, particularly affecting regional service stations.
Government to Underwrite Additional Shipments
Labor will introduce amendments to Australia's export finance laws on Monday, enabling the use of public funds to underwrite the purchase of extra shiploads of petrol, diesel, fertiliser, and other essential products. Albanese emphasised that this support is not business as usual but targets additional supplies available on the international market.
The new measures aim to mitigate financial risks for private importers, giving them confidence to secure extra supply. In a statement, the government clarified that these powers will only be used to acquire additional supply valuable for fuel security and where commercial terms would be cost-prohibitive without government backing.
Urging Voluntary Measures Over Mandates
Albanese did not rule out potential future measures such as fuel rationing or enforced working from home if supply issues worsen but expressed a strong preference for voluntary arrangements. He urged Australians to avoid panic buying, referencing media photos of multiple jerry cans being filled and stating that such behaviour does not reflect the Australian way.
"I've said we need to learn the lessons of the pandemic now. I don't want things to be mandated," Albanese said. "This isn't toilet paper that's been piled up in some garages. It's actually fuel, and that's not sensible on a range of levels."
Current Fuel Supply Levels and Challenges
Energy Minister Chris Bowen reported that as of Saturday, Australia's petrol supply had slightly increased to 39 days' worth, or 1.6 billion litres. Diesel levels remained flat at 30 days or 2.7 billion litres, with jet fuel at 30 days or 8 million litres. Of 81 fuel-carrying ships scheduled for April, six cancellations were more than replaced by new orders.
Bowen explained that the government's underwriting decision is intended to help companies make purchasing decisions in a volatile environment. Export Finance Australia will provide insurance, loans, and other financial arrangements to importers.
Focus on Regional Australia and Independent Distributors
The prime minister noted that additional fuel secured under the new powers could service uncontracted demand, assisting independent distributors who supply much of regional Australia. These distributors, who lack formal contracts with major importers, have reported struggles in obtaining enough fuel since the outbreak of conflict in the Middle East.
Just four companies—Viva Energy (operating Shell), Mobil, BP, and Ampol—supply about 85% of Australia's liquid fuels, according to the Australian Institute of Petroleum. Bowen highlighted that demand is particularly high in rural areas due to agricultural activities, and while supply is increasing, it remains insufficient in some regions.
Earlier this month, Bowen reduced fuel companies' minimum stock holding obligations, releasing about 20% of reserved supply into the domestic retail market, with a promise to prioritise regional Australia.
