Prime Minister Anthony Albanese says the Federal Government will take on the risk of extra fuel shipments. Photo: Region.
The Federal Government is seeking new fuel security powers to enable it to assume the financial risk of securing extra fuel supplies for Australia.
The government will today (30 March) introduce amendments to the Export Finance and Insurance Corporation Act in the House of Representatives.
Once passed, the new powers will be used to help secure additional fuel supplies where it would be cost-prohibitive for private suppliers to source on commercial terms without government support.
It will use Export Finance Australia to underwrite the purchase of shiploads of fuel that will add to Australia’s supply.
In announcing the plan, Anthony Albanese said the government support will not be for “business as usual”, but rather for additional supplies that are available on the international market.
“Put simply, there is a risk of a private purchase of a shipload of fuel at higher prices because there is so much uncertainty with the war in the Middle East. This is about risk mitigation for them to add to supply here,” the Prime Minister said.
“It will give suppliers the confidence to secure additional and discretionary cargoes and use them to service uncontracted demand, including for regional and independent fuel suppliers. So, we want more fuel here, and we want to make sure it gets to the right place as well.
“While Australia’s fuel supply outlook remains secure in the near term because of the actions that the government has taken, let’s be clear that the longer this war goes on, the more the impacts will be.
“So what we want to do is to be over-prepared, and that is essentially the action that we’re taking now to prepare and shield Australians from the potential implications which are there.”
Treasury, the Finance Department, Foreign Affairs, the Agriculture Department, and the Department of Climate Change, Energy, Environment and Water were all working on the plan last week.
Discussions are already underway with local and international fuel suppliers to help them source additional cargoes.
The government is relying on the “deal-making expertise” of Export Finance Australia to enter into insurance or indemnity contracts, provide guarantees, make loans, or enter arrangements needed to help secure fuel supply from international markets.
Commonwealth powers will only be used to help acquire additional supplies that are valuable to Australia’s fuel security and where it would be cost-prohibitive for private suppliers to source on commercial terms without government support.
Support will not replace or subsidise fuel that importers are already contracted to supply.
Eligibility for underwriting support will be structured to ensure additional supply can be delivered quickly through trusted operators with the capability and networks to get fuel where it needs to go.
The government’s main focus will be on ensuring additional supply helps address regional shortages and critical supply gaps.
As well as fuel, the new powers will also be used to purchase fertiliser and other essentials.
“This is a war that is across the other side of the world, but it’s having a real impact here, as it is in every nation,” Mr Albanese said.
“Here, people in local communities, farmers, small businesses, miners are all being impacted. If you go to your local petrol station and there’s no fuel, that causes understandable distress.
“We are working around the clock to make sure we deal with the fuel security issues … I want us to have the strongest possible plans, so we’re ready for what may come. I want to keep our people, our economy, and our nation moving.”
The Prime Minister is also convening another meeting of the National Cabinet today to discuss the fuel crisis.
He has not ruled out fuel rationing or mandating work-from-home if the crisis worsens, but said he preferred voluntary arrangements.
The PM has also left the door open to temporarily halving the fuel excise, although he has not revealed his hand on that possible move yet.
Opposition Leader Angus Taylor insists the fuel tax should be halved for three months to help ease the cost burden on motorists while fuel prices are sharply rising.
“We’re seeing this crisis right across our country right now, and we’re seeing a government which has failed to show leadership, has failed to show urgency and has failed to take action,” Mr Taylor said.
“I have written to the Prime Minister, and I have called on the government to slash the fuel excise.”
Energy Minister Chris Bowen updated the nation on Australia’s fuel stocks, noting that petrol reserves are slightly up, with 39 days’ supply. Diesel levels remain flat at 30 days, and jet fuel supplies are also at 30 days.
“What that tells me is that while the fuel is flowing strongly out the door, especially to regional Australia, it also continues to flow in the door,” Mr Bowen said.
“That every expected arrival has arrived and that our international supply chain remains secure at this point, as we’ve said all the way along.”
Original Article published by Chris Johnson on Region Canberra.
