The Australian federal government has announced a $10.7 billion fuel and fertiliser supply package aimed at bolstering the nation's fuel reserves amid the Middle East conflict and future global oil shocks. The plan, funded in the upcoming federal budget, includes $7.5 billion to underwrite fuel and fertiliser cargoes and support companies in expanding storage capacity, as well as $3.2 billion to establish a government-owned reserve for diesel and jet fuel. Private companies will also be required to hold an additional 10 days of fuel, increasing Australia's overall reserves to a 50-day supply.
What the Package Entails
Energy Minister Chris Bowen stated that the international environment is becoming increasingly unstable, necessitating better preparation for future crises. The minimum stock obligation (MSO) for private companies will likely commence in 2027 but won't be fully implemented until 2030, giving businesses time to enhance storage capacity. As of late April, Australia had 43 days of petrol, 33 days of diesel, and 28 days of jet fuel in reserve. The Coalition had previously proposed a plan to increase stocks to 60 days, closer to the International Energy Agency's 90-day standard.
Criticism from Environmentalists
Environmental groups have criticised the government for doubling down on petrol and diesel rather than leveraging the oil shock to transition away from fossil fuels. Greg Bourne from the Climate Council called the plan a "short-term petrol supply plan" rather than a genuine energy security strategy, emphasising that renewable energy sources like solar and wind cannot be embargoed or weaponised. Heidi Lee from Beyond Zero Emissions acknowledged short-term reassurance but warned that Australia remains deeply exposed to global fuel markets and complex supply chains, posing growing economic risks in an unstable geopolitical environment.
Shadow Energy Minister Dan Tehan described the announcement as a belated acknowledgment of a "national fuel crisis," while NRMA spokesperson Peter Khoury said the measures would help future-proof Australia's fuel needs. The oil shock resulting from the US and Israel's conflict with Iran has highlighted Australia's heavy reliance on imported fuel, with roughly 90% of refined fuel products shipped from overseas after the closure of all but two local refineries.
Domestic Refining Efforts
The government has allocated $10 million from the package to fund feasibility studies for new or expanded refining projects. Prime Minister Anthony Albanese mentioned a serious proposal that would receive support from the commonwealth and a state government, though no further details were provided. The move aims to increase domestic refining capacity, but environmentalists argue that the investment should instead focus on renewable energy to achieve genuine long-term security.
