The Government is to take advantage of dramatic falls in global oil prices by establishing a national oil reserve.
According to the Minister for Energy and Emissions Reduction, Angus Taylor, because there is insufficient storage capability for such a reserve in Australia, the country will use its agreement with the United States to store Australian Government-owned crude oil in the US Strategic Petroleum Reserve (SPR).
Mr Taylor said the Government would work with the private sector to consider options for improving domestic fuel security.
He said it would also work with refineries on temporary measures to ease the stockpiles of jet fuel by amending fuel standards under the Fuel Quality Standards Act.
“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,” Mr Taylor said.
“Australians can be reassured there is plenty of fuel in the country and we are extremely well placed to keep supplies flowing through the COVID-19 pandemic.”
He said the new measures would take advantage of the current low prices for oil and Australia’s privileged position of access to the SPR, which is among the world’s most cost-effective long-term oil storage facilities.
“This work is a down payment on a stronger and more secure fuel supply for Australian households, motorists, industry and the national economy,” Mr Taylor said.
He said Australia had been negotiating access to the SPR since 2018. He and US Secretary for Energy, Dan Brouillette signed the first arrangement of its kind to facilitate the deal in March.
“Australia will spend $94 million to buy oil at the current low global prices,” Mr Taylor said.
“Australia has access to hold oil in the US SPR for an initial period of 10 years.”
He said that at the end of February, Australia had 81 days’ worth of oil supplies, including 25 days of stocks in overseas ports and in transit to Australia.
