Fuel chief blames panic buying for ‘short term’ shortages
Australia’s largest petrol station operator is racing to lock in shipments of alternative fuels from the United States and Europe but says it has more than enough stock on hand to meet demand, even as some outlets struggle to keep up with panic buying and temporarily run out.
Ampol, which operates more than 1800 service stations across the country, confirmed on Friday that escalating war in the Middle East was beginning to disrupt the flow of conventional crude oil and refined fuels to the Asian region, a major source of Australia’s imports. The crisis is exacerbated by China’s recent move to suspend oil, diesel and jet fuel exports, which has halted around 15 percent of the region’s supply.
“Yes, there has been some disruption in the industry,” said Ampol CEO Matt Halliday. “But we continue to have too much inventory.”
The federal government and the fuel industry maintain that Australia has sufficient stocks of refined fuel and that shipments have arrived on time to meet demand. Halliday said Ampol still had about 45 days of fuel supplies on land or on ships bound for Australia. But the longer the crisis lasts, the greater the danger that larger price increases or even shortages will hit home.
Halliday said Ampol was seeking to secure “additional resources” with key suppliers, aiming to increase orders for crude oil and refined fuels from other parts of the world.
“The longer this process takes, the more cargo will arrive from further afield,” he said.
“From time to time we buy refined products from the US or Europe; my expectation is that it will become a larger part of the portfolio the longer it goes on.”
Following reports that some Ampol service stations across Sydney had run dry on Friday, Halliday acknowledged some facilities were under pressure. But he said this was due to “pulling forward” demand for gasoline and diesel, caused by customers rushing to fill up their tanks or seeking to unnecessarily stockpile fuel, rather than being the result of any actual supply shortage.
Situations where gas stations temporarily run out of fuel tend to be resolved within a few hours, he said.
“The inventory is still there, it may just be in a slightly different location,” he said. “It’s all relatively short-term.”
The price of oil in Australia has risen again this week, reaching an all-time high, as the war in the Middle East continues with no end in sight.
According to the Australian Petroleum Institute, petrol stations across the country are selling unleaded at an average price of $2.19 per litre, up 20 per cent since the conflict began.
Ampol, which also operates the Lytton oil refinery in Brisbane, decided on Friday to delay the temporary closure by two months so it could pump an extra 300 million liters of petrol, diesel and jet fuel amid deepening concerns about the fragile state of the country’s energy security.
The company had planned to temporarily close the plant in June for a major maintenance overhaul known as a “turnaround” but said on Friday it would delay those works until the beginning of August.
Ampol’s 109,000 barrel-per-day Lytton refinery and Viva Energy’s Geelong refinery, which both convert crude oil into usable fuels, are the last two remaining in Australia after a decade-long exodus, leaving Australia dependent on imports to meet 90 per cent of its liquid fuel needs.
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Nick Toscano is an economic correspondent for The Age and the Sydney Morning Herald.Connect with: X or email.
