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The announcement ahead of the Federal Budget next week will see Australia's reserves increase across petrol, diesel, and jet fuel.
The Federal Government has announced new measures to increase reserves of diesel and aviation fuel to 50 days of supply – and petrol to an estimated 40 days – an increase from the current 27 to 32 days of imports across all types.
The increase will form part of a $10.7 billion spend to shore up Australia's fuel and fertiliser security in the Federal Budget, due to be announced on Tuesday, May 12.
Of the new investment, $3.2 billion will be spent on establishing a government-owned reserve of diesel and aviation fuel of "around" one billion litres.
It will help the Federal Government deliver on an announced increase in the Minimum Stockholding Obligation (MSO) – the required minimum level of fuel stock held in facilities around the country – "by around 10 days for every type of fuel".
The 10-day increase appears to be a rough estimate, as the current minimum for diesel and aviation fuel is set at 32 and 27 days, respectively, for importers, and the Federal Government says it wants to "ensure at least 50 days of fuel supply and storage of diesel and aviation fuel".
Minimum petrol stocks have been estimated to increase to about 40 days, according to media reports, up from 27 days today.
The government said the increase in the minimums will take place "over time", and $34.7 million over four years has been earmarked in next week's budget to support the "ongoing management of Australia’s fuel security, including Government engagement with industry to plan the uplift in fuel holdings".
It's unclear if the extra security reserve of 10 days of diesel and aviation fuel will also be held in facilities owned by the fuel refiners and importers, or elsewhere.
The new fuel plan includes $7.5 billion for the establishment of a Fuel and Fertiliser Security Facility to store the new acquisitions, and provide loans.
The possibility of expanding Australia's fuel refining capabilities is also on the table, with a $10 million co-funded spend by state and territories into feasibility studies.
In March, the Federal Government dipped into Australia’s fuel reserves to release up to 762 million litres of petrol and diesel to regional areas to combat high demand and short supply.
Fuel security has been a pressing issue for the government since the outbreak of conflict in the Middle East disrupted global oil supply.
While the government has encouraged Australians to be mindful of their fuel usage, even launching a $20 million advertising campaign with fuel saving tips, there have been repeated assurances that the supply of fuel into Australia has remained steady and secure.
Prime Minister Anthony Albanese has made several trips abroad in recent months to key suppliers of Australia’s fuel, such as Singapore and Malaysia, as part of efforts to ensure stock for local motorists.
Federal Opposition leader Angus Taylor said last week that if voted into power at the next election – not scheduled until 2028 – his government would aim to increase the minimum fuel supply holdings to 60 days.
More details of the Australian Fuel Security and Resilience package will be released next week as part of the Federal Budget.
Max is the News Publishing Coordinator for Drive. He enjoys creating engaging digital content, including videos, podcasts, interactive maps, and graphs. Prior to Drive, he studied at Monash University and gained experience working for various publications. He grew up playing Burnout 3: Takedown on the PS2 and was disappointed when real life car races didn’t have the same physics.
