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The Australian government has made a temporary change to the nation’s fuel quality regulations, aiming to redirect petrol supplies effectively amidst widespread panic buying.
In response to the situation, Energy Minister Chris Bowen announced on Thursday that the amendment will permit higher sulphur content in fuel for the next 60 days. This change is expected to retain an additional 100 million litres of petrol per month within the country, fuel that would have otherwise been shipped abroad.
Bowen emphasized that the fuel supply, instead of being exported and mixed with other fuels, will be redirected to meet domestic needs.
“I have sought and obtained a commitment from Ampol to ensure that this surplus supply is prioritized for regional Australia and the spot market, alleviating pressure in those areas,” Bowen stated in parliament.
This move comes as Australians, alarmed by images of oil tankers stuck at the Strait of Hormuz, have been stockpiling fuel. The strait, a vital passage where a fifth of the world’s oil transits, is currently blockaded along Iran’s coast, causing the most significant energy supply disruption since the 1970s oil crisis.
Bowen said the distribution will be felt across rural areas but emphasised assistance to Queensland amid reports petrol stations were running dry, an issue exacerbated by flooding in the region.
He clarified that the measure would only affect an Ampol refinery that typically produces export-grade fuel, which has lower standards, but that quality for the domestic market will “remain high”.
Opposition asks if Australia will ‘run out of fuel’
Opposition leader Angus Taylor kicked off Question Time, asking the government to guarantee that Australia would not “run out of fuel as a result of the ongoing Iran war”.
Prime Minister Anthony Albanese urged Australians not to panic, saying ships with fuel were continuing to arrive “in quantities and frequencies we expect”.
“I understand that Australians are following events in the Middle East, and that they’re seeing and feeling the consequences here at home,” Albanese responded to Taylor’s question.
“Our government is looking at every practical measure required to shield our nation and household budgets from the worst of this global uncertainty, ensuring that our farmers, our regional communities and the services all Australians rely on can continue to access the fuel that they need.”
Albanese said Australia is meeting its minimum stock obligation, with 36 days of petrol stocks and 29 days for jet fuel.
However, diesel stocks were revised from earlier in the week, down to 32 days.
It follows pressure from the International Energy Agency (IEA) to release oil into the international market in an attempt to rein in crude prices amid fears that Iranian attacks will continue to block Middle East oil exports from reaching markets.
‘Plenty of fuel in Australia’
Bowen reassured Australians that while the international situation is “very difficult”, “fuel supplies continue to arrive in Australia as scheduled, and our fuel stocks remain very strong”.
NRMA spokesperson Peter Khoury reiterated the government’s calls that “there is plenty of fuel in Australia”.
“The problem we have, which we hope is now being resolved, is that Australians did panic buy,” he told reporters in Sydney.
Khoury said that half of the petrol stations across Melbourne, Sydney and Brisbane had raised their prices, despite calls from the NRMA — along with similar warnings from Treasurer Jim Chalmers and the Australian Competition and Consumer Commission (ACCC) — for retailers not to use the war as an excuse to prematurely or opportunistically jack up prices.
Khoury said Australians “understandably” started stocking up when they started seeing prices of $2.30.
He said he had been advised that the fuel supply chain would be stabilised once stockpiling — at both bowsers and fuel terminals — ended.
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