Prime Minister Anthony Albanese has announced a new fuel supply taskforce.
Following a National Cabinet meeting on Thursday, Albanese said each state and territory will be represented in the taskforce, which will coordinate “fuel security and supply chain resilience.”
The Government has also announced the release of more than 500 million litres of fuel to regional Australia on Thursday.
It comes after Iran closed the Strait of Hormuz, the world’s busiest oil shipping channel, in response to U.S. and Israeli strikes.
Strait of Hormuz
Amid the escalating conflict in the region, Iran closed access to the Strait of Hormuz, a 33-kilometre-wide shipping lane off its southern border.
The strait usually sees around 20-25% of the world’s supply of oil and liquefied natural gas (used to heat homes and generate electricity) every day.
Oil is bought and sold all over the world, which means prices are set globally. A disruption in one part of the world can affect prices everywhere.
Price impact
Before the current conflict, oil was sitting at around $US67 ($AU94) a barrel (159 litres).
On Wednesday (U.S. time), the price of a barrel was around $US109 ($AU156).
Last week, the International Energy Agency (IEA) said oil export volume through the Strait was “at less than 10% of pre-conflict levels.”
Nationally, the average retail price for petrol last week was 219.5 cents per litre, compared to 166.6 cents one month ago. Diesel sat at 245.6 cents per litre, up from 180.5 cents last month.
Some regional and rural areas have experienced fuel shortages, blamed on reduced supply to retailers and panic buying.
In response, the Government reduced fuel standards to increase local supply and has released fuel to the regions.
Opposition Leader Angus Taylor told Sky News that he believes Ampol’s Queensland refinery should always sell its fuel in Australia rather than exporting it.
Taylor said the Government “failed to do its bit” and that Energy Minister Chris Bowen is “out of his depth”.
Taskforce
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Following a National Cabinet meeting in Hobart on Thursday, Albanese announced a new Fuel Supply Taskforce aimed at making Australia “overprepared” for future crises.
Anthea Harris has been appointed as the Taskforce Coordinator. Harris has previously led the Australian Energy Regulator and the Energy Security Board.
Energy Minister Chris Bowen called Harris “eminently qualified,” saying her appointment is “the next step in preparing and responding to the supply chain challenges coming from overseas.”
States and territories are responsible for their distribution of fuel, while the Federal Government ensures its supply and security. The taskforce will include representatives from each jurisdiction.
The taskforce is designed to coordinate between both levels of government on:
- Fuel security;
- Fuel supply planning; and
- Prioritising in-demand regions.
Albanese said governments would work together, “ensuring fuel supply remains resilient... looking after each other and facing problems together."
Response
Opposition Leader Angus Taylor said the Government had shifted from “claiming fuel supplies were secure to scrambling to appoint a ‘fuel tsar’ in a national crisis.”
Taylor claimed the taskforce is a result of Bowen’s “failure to do his job and ensure Australia’s fuel security in the first place.”
“Unless it delivers urgent, practical action to secure fuel and close gaps in Australia’s supply, it will be nothing more than window dressing,” he added.
ACCC
Separately, the Australian Competition and Consumer Commission announced it will investigate “reports of alleged anti-competitive behaviour” affecting diesel supply in regional and rural Australia.
The consumer watchdog will investigate Ampol, BP, Mobil (which retails to 7-Eleven), and Viva Energy Australia, which retails to Shell, Reddy Express, and Liberty.
Chair Gina Cass-Gottlieb acknowledged “concerns held by consumers, businesses and farmers about fuel pricing and supply issues”.
