Labor to underwrite Australian fuel imports under new security powers to ensure supply | Petrol prices

The Australian government will bear the financial risk of additional imports of essential products affected by the war in the Middle East to ensure extra supplies of petrol, diesel and fertilizer to the country.

Prime Minister Anthony Albanese announced new fuel safety powers on Saturday, following a month of rising diesel and petrol prices and widespread shortages, particularly at service stations across Australia.

Labor will introduce changes to Australia’s export finance laws on Monday that would allow the government to use public funds to finance the purchase of additional shiploads of fuel, fertilizer and “other essential supplies”.

“This support from the government will not be business as usual,” Albanese said at a press conference in Sydney. “There should be additional materials available on the international market.”

The new measures aim to give private importers the confidence to provide extra supply by reducing financial risk.

The government said on Saturday the powers would only be used “to help obtain additional supplies that are valuable to Australia’s fuel security and where it would be cost prohibitive for private suppliers to source on commercial terms without government support.”

Albanese said the country’s fuel supply outlook remained secure in the near term, but the government wanted to be “over-prepared” in case the conflict escalated.

He did not rule out working from home and introducing fuel rationing if supply problems worsen, but said his strong preference was for “voluntary arrangements” rather than “taking orders from the top”.

But the prime minister urged Australians not to panic buy, saying photos he had seen in the media showing “multiple bins being filled” at a service station did not reflect the “Australian way” and that people should only buy what they need.

“I said we need to learn their lesson. [the pandemic] Now. “I don’t want certain things to be ordered,” he said.

“This isn’t toilet paper piling up in some garage. It’s actually fuel, and that doesn’t make sense on several levels.”

Energy Minister Chris Bowen said Australia had slightly increased its oil supply to 39 days’ worth, or 1.6 billion litres, as of Saturday. Diesel levels remained “fairly stable” at 30 days or 2.7 billion litres, and jet fuel was at 30 days or 8 million litres.

Bowen said six of the 81 fuel-carrying ships scheduled to arrive in April had been canceled but “new orders have replaced the rest.”

Bowen said the government’s decision to broker private companies’ purchases of additional fuel was intended to “help companies make fuel purchasing decisions.”

Export Finance Australia, the government lender generally responsible for supporting the country’s export activities, will be able to provide insurance, credit and other financial arrangements to fuel importers.

“The truth is that international shipping is available, but [it] It’s becoming increasingly expensive and increasingly risky in a volatile environment, Bowen said.

Earlier this month, Bowen cut fuel companies’ minimum stockholding obligations to around 700 million liters of gasoline and 2.2 billion liters of diesel respectively, allowing them to release around 20% of their reserves into the domestic retail market.

Promising that the extra fuel would go to regional Australia, Bowen said on Saturday there were already examples of this.

“We know that demand is particularly high in rural Australia because agriculture is in such a busy period and that supply is still not enough,” he said.

“But we’re increasing supply and working in a very complex supply chain to get the fuel where it needs to go.”

The Prime Minister said additional fuel provided with government support under the new powers could meet “non-contracted demand” to help independent distributors who supply much of Australia.

Independent distributors, who do not have formal contracts with the major companies that import most of the country’s fuel, buy gasoline and diesel from the wholesale market.

Since the outbreak of the Iran war, independents have reported difficulty getting enough fuel from major companies, resulting in some service stations running low or even drying up entirely.

Just four companies (Viva Energy, Mobil, BP and Ampol, which operates Shell in Australia) supply about 85% of Australia’s liquid fuels, according to the Australian Petroleum Institute, which represents them.