Morrison spruiks certainty as Katter sees only a tiny step
Federal cash to keep domestic oil refineries running is the latest plank in the government’s fuel security policy, with support pledged for Ampol’s Lytton facility in Queensland and Viva Energy’s Geelong facility in Victoria.
It follows the nation holding part of its resource in the US strategic reserve as of 14 months ago, which was met with widespread scepticism.
“Major industries like agriculture, transport and mining, as well as mum and dad motorists, will have more certainty and can look forward to vehicle maintenance savings and greater choice of new vehicle models,” prime minister Scott Morrison says.
The 2021-22 Budget initiatives include:
- A variable federally funded Fuel Security Service Payment (FSSP) to the refineries, “which recognises the fuel security benefits refineries provide to all Australians”
- Up to $302 million in support for major refinery infrastructure upgrades “to help refiners bring forward the production of better-quality fuels from 2027 to 2024”
- $50.7 million for the implementation and monitoring of the FSSP and the minimum stockholding obligation (MSO), “ensuring industry complies with the new fuel security framework”.
The variable FSSP has been costed up to $2.047 billion to 2030 in a worst-case scenario.
The Australian Trucking Association (ATA) dubs the news as a win for the trucking industry, in the wake of its long term, strategic advocacy campaign.
“Diesel and liquid fuel security are critical to Australia’s economy – 98 per cent of the energy for the transport sector is sourced from liquid fuel,” ATA CEO Andrew McKellar says.
“But Australia has dangerously low fuel stocks. In March 2021, Australia only had 21 days of diesel in the entire country.
“The ATA and its members have been campaigning on fuel security since 2014.
“We ran a fuel security exercise in 2015 and have engaged extensively with government since then.”
The ATA underlines that the package is to be funded by the federal government, not by a fuel security levy on road users.
“This is a big win for every road user. With the strong support of our members, we argued that there shouldn’t be a fuel levy to fund the package, because we all depend on the secure availability of fuel,” McKellar says.
The ATA believes Australia’s long term fuel security will be secured by the introduction of electric and hydrogen vehicles.
“This will be a long process, so the Government should take stronger action now to encourage the introduction of zero and low emission vehicles into the fleet,” McKellar says.
“This should include a temporary purchase incentive, support for recharging and refuelling infrastructure and amending the vehicle design rules.”
Read about the response to Canberra’s US strategic reserve deal, here
Independent federal member for Kennedy Bob Katter sees the move as just a tiny step toward self-sufficiency and will move amendments to the Coalition’s Fuel Security Billfor measures including ethanol, waste-to-diesel plants and Australian built electric cars to be driven by public servants in the cities.
“It’s doubtful whether those refineries can supply 3 per cent of Australia’s requirements,” Katter says.
“I am afraid that the government has to do investment borrowing.
“They seemed to think that if they put money up for a new mega refinery that it is ‘expenditure’, it’s not, it’s ‘investment’. We must refine our own light crude supply here, rather than export it.
“Instead of the $20-30 billion dollars a year going out of the country every year to buy petrol, there will now be no money going out of the country and the government will get back one third of every dollar through tax.
“This is an opportunity for the Government to move to achieve full fuel self-sufficiency.
“They need to call tenders for the building of a factory to produce Australian-built electric vehicles for all metropolitan public servants.
“They need uniform laws across the country for an ethanol mandate that can be ramped up over the next five years.
“And finally, the Southern Oils waste-to-diesel plants, a company based in Wagga Wagga which I have inspected, need to be supported with further government investment.”
Katter says that he had already had several discussions at the highest levels on achieving sovereign fuel security and is ready to move several amendments to the government’s Fuel Security Bill.
“I’ve had discussions with the opposition and obviously with the crossbenchers and senators, and pending the completion of these discussions there will be discussions with the government and they can either do it willingly or they will be forced to act in the public interest,” he adds.