Australian fuel reserves to be expanded amid price plunge
Angus Taylor says we’ll spend $94m on fuel to be initially stored in the US until Australia builds storage capacity.
The government will expand Australia’s local fuel storage capacity, announcing it is taking advantage of historically low fuel prices by amassing a strategic fuel reserve overseas to ultimately ship back to Australia.
Energy Minister Angus Taylor said the government will spend $94 million on the strategic fuel reserve, and that the fuel will be initially stored in the United States until Australia has developed further capacity to store its reserves.
“We’ve seen prices go negative in recent hours and are remaining very, very low,” Mr Taylor said on Wednesday afternoon.
“Initially, that reserve will be held in the United States, where there is spare storage. We have full storages here in Australia. But in time, we are exploring opportunities with the industry to establish local storage.
“In reality, what this means for farmers, for miners, for manufacturers, for commuters, all of whom rely on a secure, reliable source of fuel supply, is that they can know that the government has their back.
“We are exploring options with the industry right now for the longer term to make sure we increase our local storage capacity.”
Mr Taylor acknowledged the fuel would have to be brought to Australia “over time”, but said the government has announced the reserve because “now is the time to move” given the “unique opportunity” of plummeting prices.
He did not say if the government plans for all of the fuel stored in the United States to be transferred to Australia eventually.
The Australian understands the government will purchase the crude oil from the private sector, with details currently commercial in confidence.
Mr Taylor would not reveal what price the government plans to buy fuel at, but said Australia consumes about 0.5 million barrels of crude oil — or $10 million per day at recent prices - each normal day, which he said has not been reflected in pandemic usage.
He also said the government was in discussions with the Australian oil refining sector to ensure it had sufficient supply of crude oil.
Anthony Albanese blasted the US fuel plan and said it would not meet Australia’s obligations under the International Energy Agreement.
“It is not in line with our initial obligations because it is in the United States. The point of the international agreement is that Australia should have here 90 days’ worth of liquid reserves,” he told ABC News on Wednesday.
“The United States isn’t New Zealand. I mean, it’s not next-door.
“If there’s the sort of international conflict or issues that provide disruption to sea lanes, that may well occur at some stage in the future, then that is why nation states need to have this fuel capacity. It’s an issue of national security.”
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