Cashed-up state mulls building its own fuel reserve
Australia’s richest state is considering building its own fuel reserve for use in future energy emergencies, which will not be shared with other regions.
A fuel crisis has gripped the country since the outbreak of war in the Middle East and Iran blocking oil shipments through the Strait of Hormuz in response to US and Israeli attacks.
The Western Australian government is considering whether it can build a fuel stockpile to support energy security and supply chains in the vast state.
“This will be additional volumes of diesel purchased and stored by the state government for times of trouble and times when we see challenges in supply chains,” Energy Minister Amber-Jade Sanderson said on Sunday. he said.
“This will be for Western Australians only and will be directed to the areas that need it most at the discretion of the state government.”
These areas will include agricultural regions at the end of supply chains, mining operations, and remote communities dependent on diesel-to-electricity generators.
The state government has not said how much the stockpile would cost, but Ms Sanderson said talks were ongoing for a “million-litre” reserve.
“This will help support the spot market (and) support end areas of the supply chain in the Great Southern, Wheatbelt and Goldfields where they have had more difficulty getting fuel (since the fuel crisis began).”
WA’s strategic stockpile will be in addition to the national fuel reserve, which the state believes it can still access in the event of another crisis.
“It is a requirement that states get their fair share,” Ms. Sanderson said.
The current fuel emergency has revealed that some suppliers are not storing any of their national fuel stock obligations in Western Australia.
“Viva and Ampol for example… are in Queensland,” Ms Sanderson said.
Mr Sanderson said the initial focus was on diesel, with WA using about a quarter of all supplies in Australia.
The WA government is assessing whether the state has the capacity to store and distribute extra fuel.
“There is significant storage capacity across the state,” Ms Sanderson said.
“We are heavy users of fuel, especially in the resource sector, so we have storage capacity.”
Existing distribution networks have been able to cope with the increase in fuel released from national reserves in recent weeks.
“Our challenge is reaching the second- and third-tier distribution network, the individual truck owners,” Ms. Sanderson said.
“They are largely the distributors that we would essentially use if we wanted to manage a particular part of the supply chain.”
