Up to $200m in grants will back the development of onshore diesel storage in Australia from Friday, after years of concerns that Australia is not prepared for a global fuel crisis.
Energy Minister Angus Taylor says the grants to support the development of an extra 780 megalitres of diesel storage will create 1000 jobs, as his entire fuel security package faces opposition from miners and farmers who do not want to pay a 1c a litre fuel levy.
Successful diesel storage grant recipients will get up to $33.3m, with the federal government covering up to 50 per cent of total eligible project expenditure.
Mr Taylor said the successful projects would target strategic regional areas and add to the nation’s existing fuel infrastructure.
“The Morrison government will oversee the rollout of the diesel program this year, which will not only create jobs, but will help to make sure Australian families and businesses can access the fuel they need, when they need it,” Mr Taylor said.
“Fuel, and diesel in particular, is the lifeblood of so many sectors in our economy, including our farmers, truckies and tradies.
“It is essential that we get the right balance and location of our onshore stockholdings.
“Increasing Australia’s capacity to store diesel complements our other fuel security measures. This will strengthen our ability to manage potential disruptions, protect Australian motorists from future high prices, and keep our economy moving.” In order to receive the grant, successful applicants are expected to start constructing their new diesel storage rigs from the middle of this year and finish in the next three years.
International Energy Agency rules require member countries to maintain 90 days of average fuel imports across all stocks. The government says Australia has 85 “IEA days” of supply if stocks en route to Australia are included.
October 2020 fuel statistics show the country has only 25 “consumption days” of petrol stocks, and 21 days of diesel. Those numbers are not directly comparable with IEA days, but strategists say they are far too low in the event of a shock to fuel supplies.
The government will also fund a new 1c/l “production payment” until July next year to keep three existing refineries in business, when a new mechanism will be introduced to charge the levy to petrol, diesel and jet fuel users.
The National Farmers Federation and Minerals Council of Australia say their members should be exempt from the payment, as they are from the rebatable 42.3c/l fuel excise, in a move that would leave taxpayers or everyday motorists to foot the bill.
Extracted from The Australian