Labor would buy oil to prevent Australia running out of fuel
A national stockpile of crude oil and fuel would be created if Federal Labor won the next election, Bill Shorten has said.
- Australia only has 18 days’ worth of car petrol and 22 days’ worth of diesel in reserve
- Under an international agreement, importers of fuel should have 90 days’ worth stockpiled
- Stocks have fallen over recent years, coinciding with oil refinery closures
Australia imports most of its crude oil and refined petrol, and only has a few weeks’ worth of fuel in reserve.
Stocks have been below mandated levels since 2012, raising fears of severe shortages in the event of conflict.
Opposition Leader Bill Shorten said creating a government-owned reserve was “an important national security measure”.
“It’s simple — to increase our national fuel security, we need to increase our national fuel stocks,” he said.
“As we’ve become more reliant on the global fuel market, we’ve also become more vulnerable to international risks and uncertainty.”
Major oil companies in Australia currently hold stocks, as do some large consumers, but there are no laws forcing them to do this.
At the end of December, Australia had 18 days’ worth of car petrol, 24 days’ worth of crude oil, 22 days’ worth of diesel and 107 days’ worth of aviation gas.
It is unclear which refined fuels would be held in reserve.
Mr Shorten said a consultation process would be established before the measure was introduced.
“We will consult with industry, oil and gas importers, refineries and with national security experts on the implementation of the government national fuel reserve.”
A number of domestic fuel refineries have closed over recent years.
Peter Jennings from the Australian Strategic Policy Institute previously said a lack of refineries and fuel farms meant Australia currently did not have the capacity to store large quantities of fuel.
“We would not be able to actually keep much in-country stock, because our fuel farms are now so decrepit and falling out of service that we wouldn’t have the capacity to store it all,” he said.
Energy Minister Angus Taylor said the policy could cost “tens of billions of dollars” and Labor needed to explain how it would be funded.
“Will it be a tax on all of us through the tax system, or will they slug us at the fuel bowser?” he said.
“We are not going to increase the price of fuel at the bowser when it seems clear Labor wants to do that one way or another.”
Liberal Senator Jim Molan has previously raised concerns about the situation, and the Coalition last year announced an inquiry into fuel reserves.
Earlier this week, Labor announced it would create a strategic fleet of merchant ships to help secure crucial supplies if a crisis emerged.
The vessels would be commercially operated but could be repurposed by the government in an emergency.