Source: Prime Minister of Australia
ANTHONY ALBANESE, PRIME MINISTER: Good morning. This morning, the National Cabinet has met for another important update on our preparedness for the National Fuel Security Plan. It is important to recognise the fact that the longer that the Strait of Hormuz is essentially shut, even in spite of the ceasefire being in place for four weeks now, the longer this conflict goes, the greater the impact will be. It’s as simple as that. Our number one priority remains shielding Australians from the worst effects of this crisis. And we’re working across with state and territory governments to ensure that the national interest is looked after. That is why as well, my Government has cut the tax on fuel in half and we’ve worked relentlessly to secure our fuel supply lines. So far, we are faring well, and Australia remains at level two of the plan, and we want to stay at level two for as long as possible.
This is in part due to the work of the National Fuel Security Taskforce that we established, working with state and territory governments to deliver. But it’s also in part because of the work that Australians are doing. As our campaign says, every little bit helps. And the demand spike that we saw prior to Easter has stopped in terms of the behaviour of people turning up at petrol stations and filling up jerry cans and filling up their garages essentially with fuel that we warned was not only not in the national interest, it was actually dangerous. It was very much different from the behaviour that we saw during COVID of people filling up their garages with toilet paper. Fuel is different. It is dangerous. And we again thank people for overwhelmingly doing the right thing.
People are taking voluntary action as well. More people are catching public transport, more people are car sharing, more people are working from home where it is in the interests of employees and employers going forward. And we’re working as well across jurisdictions to make sure that we continue to create circumstances where, as much as possible, we want actions to be voluntary going forward as well. The fact that more ships arrived in Australia during April than during March, February or January, I think just underlines the work that we’ve done securing supplies from our traditional partners, but also the expansion in supplies of fuel deliveries from places like the Netherlands, South America, North America, Algeria as well. And the work that we’re doing with our traditional partners in this region has been very important.
Today, I am also announcing that the Federal Budget next week will include an Australian fuel security and resilience package. This is aimed at making sure that Australians can have more confidence in protecting our energy sovereignty, not just during this crisis, but going forward as well, protecting our nation’s energy interests. The package will provide more than $10 billion to secure Australia’s near-term fuel and fertiliser security, establish a permanent government-owned Australian fuel security reserve of around a billion litres, and lift the Minimum Stockholding Obligation by around 10 days for every type of fuel. This will support an overall expansion of Australia’s onshore fuel reserves to ensure at least 50 days of fuel supply and storage of diesel and aviation fuel.
As part of our plan to deliver energy sovereignty, our Australian fuel security and resilience package will comprise the following elements: $7.5 billion for the establishment of a fuel and fertiliser security facility to increase supply and storage of fuel and fertiliser by providing financial support including loans, equity guarantees, insurance and price support. This is the work that’s taking place with Export Finance Australia that has enabled us to secure those additional cargoes, particularly of diesel and jet fuel, that has very much protected Australia’s interests.
Secondly, $3.2 billion to establish a government-owned Australian fuel security reserve of around a billion litres to increase long-term diesel and aviation fuel supply and storage in combination with an increase to the Minimum Stockholding Obligation to increase Australia’s critical fuel reserves to 50 days. Now, our fuel security reserve will focus on regional stock outs and supply constraints for essential users in the event of another supply crisis.
And lastly, the fourth element is $10 million to support feasibility studies into newer, expanded fuel refining capabilities to be co-funded with state and territory jurisdictions. As a matter of courtesy, I went through these measures at the National Cabinet meeting that met this morning. We know there’s at least one of a serious proposal that will receive the support of a state government and Federal Government to examine the possibility of additional refining capability going forward as well. And we want to make sure that there’s buy-in, which is why any proposals will be jointly funded by state and territory governments as well as the Commonwealth. Now, we’ll consult on the implementation of the fuel reserve to underwrite or purchase fuel support, storage and trade stocks as needed to ensure our fuel security during severe or prolonged fuel supply disruption.
Today’s meeting was very constructive. It followed yet another meeting of our National Security Committee meeting today. We’re receiving updates. I think it is obvious to say that we live in very volatile times and there is uncertainty about events in the Middle East and of course therefore uncertainty about the implications for the impact here in Australia. But what Australians can be certain of is that we are throwing everything at this to make a difference to protect the interests of Australians. I’d ask the Minister to make some comments and then we’re happy to take some questions.
< CHRIS BOWEN, MINISTER FOR ENERGY AND CLIMATE CHANGE
But we’ve also been looking at what we need to do to better prefer prepare Australia for future shocks. We know that the international environment is getting more unstable, not less. And so, we have to look at what we have done in this crisis and see what we can do to build Australia to be better prepared even for the next international crisis, whenever it might occur. Hence the announcement the Prime Minister is making today of a very big investment, a big investment in a government-owned fuel reserve. At the moment we have requirements, the Minimum Stock Obligation on private sector companies which we are increasing, requiring them to hold more fuel in Australia. But we’re not just doing that. Australia is actually in a minority of countries in the International Energy Agency who don’t have a government-owned fuel reserve. We will now have a government-owned fuel reserve of around a billion litres to add to those minimum stocks that the private sector must hold, particularly focused on diesel and jet fuel, where we do need to ensure greater domestic capacity and supply in the worst of circumstances. This is a big change in our approach as a country and a good one, building on the increase in the Minimum Stock Obligations that we’re requiring the private sector to hold 10 days and adding more so that we would have 50 days’ worth of diesel and 50 days’ worth of changes jet fuel, which is an appropriate level.
In addition, we’re also continuing to work to help Australians diversify their own choices. Yesterday, the Treasurer and I announced our ongoing support for EVs through the EV tax discount. Five hundred and fifteen Australians a day bought an EV in April. That compares to 29 a day when we came to office. And when you look at the fuel use that’s been avoided by our electricity tax discount so far, of the cars that have been bought at that discount in its first years of operation, they will avoid 1 billion litres worth of fuel use over their lifetime. Now, EVs aren’t for everyone, but for those who choose to take them up, it’s making more fuel available for the rest of the economy, and so we’ll continue that support as well. This is a good announcement that the Prime Minister has made today. It will be a centrepiece of next week’s Budget and it best prepares Australia for whatever might come in the years ahead.
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