Scott Morrison announces $2bn for fuel security in Australia

A new $2 billion plan has been unveiled to keep the country’s remaining refineries running and require them to hold more fuel supply in Australia.

NSW families and businesses will be saved from higher petrol prices under a $2 billion plan to keep the country’s remaining refineries running and require them to hold more fuel supply in Australia.

Prime Minister Scott Morrison will on Monday unveil the federal government’s fuel security package designed to sure up our domestic stocks, keep two major refineries running and fast track the production of higher quality petrol.

“Major industries like agriculture, transport and mining, as well as mum and dad motorists, will have more certainty and can look forward to vehicle maintenance savings and greater choice of new vehicle models,” he said.

Prime Minister Scott Morrison says the government will spend up to $2bn to secure Australia’s fuel supply. Picture: Adam Taylor

The government will spend up to $302m on major refinery infrastructure upgrades to bring forward the production of better quality fuels three years to 2024.

From July next year fuel importers and refiners in Australia will be required to hold enough stocks of petrol, diesel and jet fuel to cover between 20 and 24 days of consumption, and the government has allocated $50.7m for the implementation and monitoring of the new rules.

Refineries will also be paid a variable Fuel Security Service Payment, which supports them to hold the required level of fuel in downtimes, but not if prices are performing well.

In a worst-case scenario this could cost up to $2.047bn by 2030 if current COVID-19 economic conditions continued.

Australians will have access to higher quality fuel sooner under the government’s plan. Picture: NCA NewsWire / Kelly Barnes

The funding will support the Ampol refinery in Queensland, and the Viva refinery in Victoria, and is expected to protect the jobs of about 1,250 current employees, and create a further 1,750 construction jobs.

Mr Morrison said the package would make Australia “more self-sufficient” and “secure”.

“This is a key plank of our plan to secure Australia’s recovery from the pandemic, and to prepare against any future crises,” he said.

“Earlier investment in Australia’s ability to produce better quality fuels, including ultra-low sulphur levels, will also improve air quality and deliver an estimated $1 billion in lower health costs.”

Energy and Emissions Reduction Minister Angus Taylor said Australia’s economy was reliant on fuel and this significant package would better protect the country from shocks in the system.

“Fuel is what keeps us and the economy moving. That is why we are backing our refineries,” he said.

“Supporting our refineries will ensure we have the sovereign capability needed to prepare for any event, protect families and businesses from higher prices at the bowser, and keep Australia moving as we secure our recovery from COVID19.”