The Morrison Government is boosting the nation’s long-term fuel security by taking advantage of dramatic falls in global oil prices and building on our historic agreement with the United States to access their Strategic Petroleum Reserve (SPR).
Under the new measures, Australia will establish its first Government-owned oil reserves for domestic fuel security.
This will include a deal with the United States to store Australian Government owned crude oil in the US SPR.
Minister for Energy and Emissions Reduction Angus Taylor said the Government would also work with the private sector to consider options for improving domestic fuel security, and would work with refineries on temporary measures to ease the stockpiles of jet fuel.
“The Government is taking action to improve Australia’s fuel security and enhance our ability to withstand global shocks, such as the COVID-19 pandemic, when they reach our shores,” Minister Taylor said.
“The new measures will take advantage of the current low prices for oil and Australia’s privileged position of access to the SPR, which is amongst the world’s most cost-effective long-term oil storage facilities.
Member for Barker said this work is a down payment on a stronger and more secure fuel supply for households, motorists and industry in Barker.
“Global oil prices have hit new lows due mainly to a significant drop in demand caused by COVID-19 and we are taking advantage of these reductions,” Mr Pasin said.
“Australians can be assured there is plenty of fuel in the country and we are extremely well placed to keep supplies flowing through the COVID-19 pandemic,” Australia will spend $94 million to buy oil at the current low global prices. This will also count towards Australia’s IEA 90 day stockpiling commitment.
The COVID-19 fuel security package includes:
• Purchasing crude oil to store in the US SPR;
• Launching a process to work with the private sector to identify options to further strengthen our domestic fuel security; and
• Working on changes to the fuel standards to provide immediate relief to refineries for the duration of the COVID-19 pandemic.
Mr Pasin welcomed the Federal Government’s action on fuel security and called for the South Australian State Government to now implement real-time fuel pricing measures in line with other mainland States and Territories.
“In WA, NSW, QLD and the NT fuel retailers are required to report their prices to the State Government in real time, which is then shared to consumers to ensure they have the information easily accessible and are able to get the best price,” Mr Pasin said.
“Improved transparency will lead to improved competition which will put downward pressure on prices helping to alleviate cost of living pressures,” Mr Pasin said.
While there are differences between the models operating in WA, NSW, QLD and the NT, the preference according to Mr Pasin is for the Queensland model.
“The Productivity Commission has considered various models for the South Australian Government and whilst that report, which I haven’t seen, will no doubt have provided advice regarding the merits of the various models, my preference is for the model operating in Queensland.” Said Mr Pasin
“Real time fuel pricing and the information symmetry it provides is a must if we want South Australia consumer to enjoy the advantages currently provided to consumers in WA, NSW, QLD and the NT” Mr Pasin said In addition the data collection that real-time fuel pricing facilitates is invaluable according to Mr Pasin.
“All too often investigations into alleged anti-competitive practices by retail fuel business are frustrated because of the lack of access to historical pricing data, real-time pricing would mean those frustrations are a thing of the past. It’s about ensuring consumers don’t get a raw deal at the bowser” said Mr Pasin.
Mr Pasin said he was also keeping a keen eye on petrol prices in Barker to ensure the reductions in prices were being passed on to consumers in regional areas as was the case in the cities.
“While price changes always take a while longer to hit the regions, it’s important to ensure that we do see prices fall relative to the city. I know the ACCC is watching to ensure wholesale prices are being passed on, including in our regions, in the wake of the fall in global oil prices,” Mr Pasin said.