15
Jul

Morrison government fortifies nation’s fuel security with $260m investment

A $260m investment will expand Australia’s diesel storage capacity, fortifying the country’s long-term fuel security.

The Morrison government will partially fund 10 projects across the country, which they hope will support around 1,000 new jobs and see the country’s diesel stockholdings increase by 40 per cent from mid-2024.

Energy and Emissions Reduction Minister Angus Taylor said the grants would help minimise shortages of diesel and drive investment into these strategic regional locations. Picture: John Feder

Boosting Australia’s Diesel Storage program is part of the federal government’s implementation of the Minimum Stockholding Obligation (MSO), which is focused on increasing onshore refining capabilities and minimising localised shortages during peak usage periods, emergencies and times of conflict.

While Australia has avoided a major supply shock since the OPEC oil crisis in the 1970s, the country is vulnerable to disruptions to global supply chains, and the federal government’s investment will reinforce sovereign fuel security at a time of rising geopolitical tensions in the Asia Pacific.

The obligation, part of the recently passed Fuel Security Act 2021, will require both importers and refiners to maintain supplies of major transport fuels – including petrol, jet fuel, and diesel – at, or above, pre-Covid national average stock levels from July 2022.

From mid-2024, fuel importers will be required to increase their diesel stocks by 40 per cent.

The funding will help increase storage capacity by 779 megalitres.

The program is a central pillar in the Morrison government’s fuel security package announced in the 2020-21 budget. It is aimed at augmenting Australia’s International Energy Agency compliance total, which requires member countries to have 90 days of stock. In July last year, Australia had 84 IEA days.

By increasing the volume of diesel stock the country keeps onshore, and with many of the projects located in strategic regional locations, Energy and Emissions Reduction Minister Angus Taylor said the grants would help minimise shortages of diesel and drive investment into these areas.

The Morrison government will supply grants to projects in every state and territory except for Tasmania and Queensland, with the funding covering up to 50 per cent of total eligible project expenditure in the MSO.

The program will see four storage locations constructed in NSW (Newcastle and Port Kembla) two in Western Australia (Kwinana and Port Hedland) and Victoria (Geelong and Newport) and one in Darwin and Adelaide respectively.

Extracted from The Australian