Australia failing to hold fuel supplies for an emergency

By Cameron Stewart

Associate Editor                                                   



AUSTRALIA is the only developed nation that does not have secure sources of emergency fuel at a time of growing terrorism and instability in the Middle East.

A report written by former air force vice-marshal John Blackburn for the NRMA warns that any disruption to Australia’s trade routes through an act of ­terror or a conflict in the South China Sea would leave the country without fuel in weeks, grounding the military and bringing essential services to a halt.

The report finds Australia is alone among developed countries in not having government-mandated stocks of oil and fuel to rely on in an emergency.

“Australia is out of step with virtually every other comparable country in the world,” it says.

The report reviewed the transport energy policies of 75 countries including Britain, Japan, Korea, France, Italy and Sweden.

It found that only Australia ­relied ­totally on market forces rather than government-owned or man­dated stocks to ensure ­secure access to transport fuel. “A comparison of Australia’s oil/fuel stockholding versus ­examples of regional and European nations is sobering,” it says.

“It is staggering to realise that Australia is not only deficient in terms of the IEA (International Energy Agency) stockholding obligations, but that we hold no government-controlled or mandated stocks at all, in stark ­contrast to regional and global peers.”

The report is the third of its kind in the NRMA’s push to highlight the lack of fuel security and push for policy change. “The Australian public is ­entitled to ­expect clear assurances from our government we have sufficient Australian-­controlled sources of fuel within Australia to support essential needs in the event of overseas supply interruptions,” it says. “With no government-owned fuel stocks, little reporting on ­industry stocks and very little public analysis of supply-chain risks, it is difficult to see how our government could currently provide us with that assurance.”

Mr Blackburn said Australia’s combined dependency on crude and fuel imports for transport had grown from about 60 per cent in 2000 to more than 90 per cent today. “In just 36 months, since mid-2015, 40 per cent of our nation’s oil refining capacity will have been shut down,” his report says. “During this same period, the political instability in some Middle Eastern countries has worsened, our stocks have dwindled and our capacity to produce specialist fuels for our defence forces has eroded.”

Mr Blackburn said the government’s faith in market forces to ensure energy security was misplaced and was a threat to ­national security.

“A significant supply disruption to our shipping lanes or trade routes — which could take the form of a natural disaster, accident, commercial failure, act of terror or war — could quickly ­imperil Australia’s capacity to provide for essential, everyday services and our military forces.”

last year the Bur­eau of Resources and Energy Economics reported, industry stocks were 19 days of automotive gasoline, 17 days of aviation fuel and 12 days of diesel oil. “Countries supplying fuel to Australia do not seem as relaxed as Australia about fuel security,” the report says.

Now I am advised that we buy our ready refined petroleum from Singapore, so 80% of our refineries are now storage and distribution operations [jobs gone off shore].and refinery costs largely or totally eliminated .

Can the executive of ACCC who have been investigating petroleum pricing for years, please explain why today we are experiencing record prices at the bowser from the major petroleum companies, Yet the independents are up to 25% lower on comparable octane rated fuels.!