Barnaby Joyce

Boosting fuel security for the New England

14 Sep 2020

The Coalition Government is taking action to secure Australia’s long-term fuel supply, keep prices low for consumers and create more than 1000 new jobs, many in regional areas, through a new domestic fuel security package. 
  
As part of its 2020-21 Budget, the Government will deliver a $211 million investment in new domestic diesel storage facilities, reforms to create a minimum onshore stockholding and measures to support local refineries. 
  
This will be delivered through a combined market and regulatory framework, with three key elements: 
•    Investing $200 million in a competitive grants program to build an additional 780ML of onshore diesel storage;
•    Creating a minimum stockholding obligation for key transport fuels; and 
•    Backing the refining sector by entering into a detailed market design process for a refinery production payment. 

Federal Member for New England, Barnaby Joyce, said for the industry to receive support, refineries will be required to commit to stay in Australia.

“Our farmers, truckies, miners and tradies here in the New England all rely on a secure fuel supply to go about their jobs and put food on the table for their families,” Mr Joyce said.

“That’s why it’s imperative we have access to an adequate domestic fuel supply at a price people can afford. 

“Supporting refineries will ensure Australia has the sovereign capability it needs for any potential event, protecting local families and small businesses from higher prices and backing thousands of jobs across the economy as we recover from COVID-19.”  

The construction of diesel storage will not only secure our diesel supplies but will support up to 950 jobs, along with 75 new ongoing jobs, many in regional areas.

Prime Minister Scott Morrison said Australia’s fuel security was essential for our national security and that we had been fortunate to not have experienced a significant fuel supply shock in over 40 years. 
  
“Our positive changes to the fuel market will ensure Australian families and businesses can access the fuel they need, when they need it, for the lowest possible price,” the Prime Minister said. 

“Like all sectors of the economy, the COVID-19 pandemic is having an impact on Australia’s fuel industry. The events of 2020 have reminded us that we cannot be complacent. We need a sovereign fuel supply to shield us from potential shocks in the future.” 
  
Minister for Energy and Emissions Reduction Angus Taylor said the Government recognised that Australian refineries were under significant financial pressure and was committed to working with the sector to ensure it had a long-term future. 
  
“Almost all Australians are reliant on fuel and it is the lifeblood of so many sectors in our economy. Our farmers and miners rely heavily on diesel to do their jobs and provide services, while the transport sector sources 98 per cent of its energy from liquid fuels,” Minister Taylor said. 
  
A minimum stockholding obligation will act as a safety net for petrol and jet fuel stocks and increasing diesel stockholdings by 40 per cent. 
  
The Government will work with industry over the next six months on the legislative and regulatory design of the package. 
  
Refineries play an important role in securing Australia’s fuel security and putting downward pressure on fuel prices for consumers. Modelling has shown that a domestic refinery capability is worth around $4.9 billion (over 10 years) in value to Australian consumers in the form of price suppression.  
  
The Government is committed to a sovereign on-shore refinery capacity and will design a market system for a production payment that recognises the fuel security benefits Australia’s refinery sector provides. It will protect Australian families and businesses from the around 1 cent per litre increase that modelling shows would hit fuel if all refineries were to close in Australia. 
  
This domestically-focused package builds on Government action to purchase up to $94 million of crude oil at record low global prices to be stored in the US Strategic Petroleum Reserve for access during a global emergency.