Australia’s Way of Life at Risk Amid Fuel Security Crisis

Australia’s way of life could grind to a halt within weeks if an international crisis disrupts fuel imports, warns Qantas chairman John Mullen. With dangerously low reserves, petrol stations would run dry, and essential services would be crippled.

Speaking at the Australian Institute of Company Directors, Mullen stressed that Australia’s fuel security is at risk in an era of rising global instability. He highlighted that the country holds only 27 days of petrol reserves and 32 days of diesel, cautioning that a regional conflict could instantly cut off supply, bringing the nation to a standstill.

A Vulnerable Supply Chain

Official data from the Energy Department paints an even bleaker picture: as of the December quarter, Australia had just 23 days of diesel, 25 days of petrol, and 21 days of jet fuel. The International Energy Agency recommends maintaining 90 days’ worth of net imports, yet Australia holds just 49 days—far below other nations like Japan (199 days) and Germany (129 days).

Australia’s dependence on imports has left it dangerously exposed. A 2022 report from The Australia Institute revealed that 90% of the nation’s fuel is sourced from overseas, yet Australia lacks a strategic petroleum reserve and a significant maritime shipping fleet. The domestic refining sector has collapsed—from 12 refineries in 2012 to just two today: Viva Energy’s facility in Geelong and Ampol’s refinery in Brisbane.

Adding to the risk, around 30% of Australia’s imported refined jet fuel comes from China, a nation that recently deployed naval vessels near the country’s coastline.

Geopolitical and Economic Risks

Former air vice-marshal John Blackburn AO likened the current situation to Australia’s shock at Britain’s failure to defend Singapore in World War II. He warned that Australia’s security reliance on the ANZUS treaty with the US is flawed, as it only guarantees consultation, not military support.

There are several scenarios that could cut off Australia’s fuel supply:

• Military conflict: A regional war or global tension could disrupt shipping routes, halting imports overnight.
• Pandemics: A severe outbreak could devastate the workforce, including those refining and transporting fuel.
• Economic collapse: A financial shock could prevent shipping companies from securing credit, leaving fuel shipments stranded.

Blackburn warned that if financial markets seized up, ships could be stuck in ports due to unpaid debts, and global economies might struggle to act quickly enough to stabilise the situation.

In an emergency, the government could seize control of oil stocks and refineries under the 1984 Liquid Fuel Emergency Act. However, this measure would only mitigate short-term disruptions.

Government Response and Its Limitations

Both major political parties have taken steps to improve fuel security, but progress has been slow. The 2021 Fuel Security Act introduced a minimum stockholding obligation (MSO), requiring Australia to hold at least 27 days of petrol, 32 days of diesel, and 27 days of jet fuel. While stock levels exceed these minimums, they remain dangerously low.

Former energy minister Angus Taylor allocated $200 million in 2020 to expand diesel storage. More recently, Energy Minister Chris Bowen announced a $250 million investment in low-carbon liquid fuels. Critics argue these measures fail to address Australia’s immediate vulnerability.

The Political Challenge

John Blackburn, who has campaigned for greater fuel security for over a decade, believes political divisions have prevented real action. He argues that policymakers are stuck between one side pushing for fossil fuels and another demanding an immediate transition to renewables—neither of which solves the short-term crisis.

While long-term solutions like green energy and electrification of transport will eventually reduce dependence on fuel imports, they require decades to implement. In the meantime, Blackburn insists that Australia must restore some level of domestic refining capacity to secure supply in times of crisis.

He also suggests politicians may fear public backlash if they openly acknowledge Australia’s vulnerability. If the government admitted the severity of the issue, people would demand immediate solutions—solutions that are not yet available.

The Road Ahead

Australia’s fuel security remains a critical but overlooked national threat. Without urgent investment in refining capacity, alternative energy, and emergency reserves, the country risks being unprepared for the next global crisis.

The question is not whether a fuel crisis will happen—but when.

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