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Taylor takes first local step to cover fuel security gap

Trucking industry welcomes first step on identifying domestic options

 

Having spent the better part of a decade denying fuel security was a gaping national strategic shortcoming, the federal government is finally making an initial move on the matter.

Having faced derision on buying cheap oil to be stored in the US Strategic Petroleum Reserve, based near that country’s Caribbean coast, federal energy minister Angus Taylor announces a ‘request for information’ (RFI) process to identify opportunities to increase Australia’s domestic fuel storage capacity.

The Australian Trucking Association (ATA), a long-term critic of federal fuel security policy, sees the move as a positive.

“Fuel security is a national issue. In recent months we have seen the vital importance of trucking to support our economy and keep communities supplied,” ATA chair David Smith says.

“We have called for the development and implementation of a staged plan to increase Australia’s domestically held fuel stocks.

“The RFI process is an important step towards this aim.

“We congratulate the Government on turning its focus to measures that will store fuel in Australia where we can get to it in an emergency, unlike its unwise decision to spend $94 million on storing fuel in the United States.” 


Read about how the US fuel reserve deal was greeted, here


The government says RFIs are being sought from industry players on potential storage projects, which will allow it to examine different volume, location and fuel storage specifications.

“This will inform the next steps for exploring storage opportunities, to be announced later in 2020,” it adds, casting recent moves are part of a ‘fuel security package’.

As part of that, it is also “working to support the local refining sector in both the short and medium term”.

Temporary changes to diesel standard will be allowed to enable all Australian refineries to utilise excess jet fuel supplies.

It is stated that this will ease the storage pressures currently being felt by refineries from the drop in demand for fuel products as a result of Covid-19.

“High quality diesel will continue to be supplied to the retail market and the change will not affect the operation of vehicles, the environment, or health and safety,” the government says.

“The temporary change to the diesel flashpoint was supported by state and territory agencies, fuel refiners, car and truck manufacturers, and clean air experts.”

It has also begun a long-term strategic study of the refining industry.

“The Morrison Government has a comprehensive fuel security package, with the next steps of this plan focusing on strengthening Australia’s local industry,” Taylor says.

“The government wants to assess how we can best partner with industry to increase our storage capacity to further enhance our onshore fuel security.

“We are also working closely with our local refineries to better understand their challenges by assessing the long-term sustainability of the sector.

“By taking an industry-wide view, we will be able to make sure that we protect Australia’s national sovereignty and back the future of our fuel-using industries like our truckies, miners, farmers, and Australian motorists.”

The ATA sees other positive aspects.

 “The ATA is very pleased that the request for information is broad enough to allow the Government to consider innovative proposals such as the plan advanced by ATA member Western Roads Federation to provide tax concessions to businesses that invest in fuel storage,” Smith says.

“This proposal would have advantages in dealing with regional fuel supply disruptions – such as the Victorian diesel supply disruption in 2012 – as well as national emergencies.”

Smith says that Australia did not have enough petrol and diesel in stock.

“The latest petroleum statistics released by the government show that Australia’s diesel stocks fell from 23 consumption days in January to 18 days in March,” he adds.

 

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