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Opposition Pledges to Fix Australia’s Fuel Security

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By MarEx 2019-03-02 18:36:00

Australia's Labor Party leader Bill Shorten had committed to a government-owned national fuel reserve. Currently in opposition, Shorten is bringing the topic into political debate ahead of a federal election this year.

Shorten said a consultation process would be established with industry, oil and gas importers, refineries and with national security experts prior to establishing the reserve.

Current Energy Minister Angus Taylor said the policy could cost tens of billions of dollars and Labor would need to explain how it would be funded.

However, the Maritime Union of Australia (MUA) has applauded the idea of a reserve describing it as an essential step to protect Australia from natural disasters or global crisis that could disrupt oil supplies.

Australia has been in breach of the the International Energy Agency’s 90-day fuel stockholding obligation since March 2012. Australia has approximately 22 days of petrol, 17 days of diesel and 107 days' worth of aviation gas on hand.

MUA National Secretary Paddy Crumlin said the fuel reserve commitment, along with Labor’s previous announcement of a National Strategic Fleet that will include oil tankers and gas carriers, were vital steps required to safeguard the security of an island nation that is reliant on fuel imports.

“Australia is the only developed oil-importing country without government-controlled stocks of crude oil or refined petroleum products, which has become more and more of an issue as the proportion of our fuel that is imported has risen to well over 90 percent,” said Crumlin.

The MUA last year commissioned a report Australia’s Fuel Security – Running on Empty which found that Australia relies on the equivalent of almost 60 full-time fuel import tankers to keep supplied with petrol, diesel and jet fuel. “This research concluded that the Australian economy would grind to a halt within weeks of a major crisis in the region that interrupted fuel shipments,” Crumlin said.

“It also found that Australia’s reliance on foreign flagged tankers removed any opportunity for the Commonwealth to requisition national flag tankers if necessary to secure imports or coastal distribution requirements following major economic or geopolitical disruptions.”