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Peak bodies in joint fuel security call

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Concerns around industry reliance on diesel and risk from supply disruptions

Peak bodies in joint fuel security call
Diesel is still the critical fuel type in Australia

 

The transport sector’s vulnerability to impacts from global fuel disruptions means now is the time to take action on Australia's liquid fuel security.

That is the joint message from peak associations National Road Transport Association (NatRoad), Western Roads Federation (WRF) and Northern Territory Road Transport Association (NTRTA), who are calling for the federal government to prioritise securing Australia’s liquid fuel supply.

NatRoad notes that on April 4, 2019, the Department of the Environment and Energy released the Interim Report on the Liquid Fuel Security Review, which recognised that liquid fuel – especially diesel – accounts for 98 per cent of transport needs, making the transport sector vulnerable to impacts from liquid fuel disruptions.

NatRoad made a submission in May to the federal Department of the Environment and Energy in relation to its work on securing Australia’s liquid fuel supply.

It says it supports the finding in the Report that diesel fuel will be an important energy source for Australia beyond 2040, pointing to the following:

  • Diesel remains a critical fuel type for Australia, with demand growing faster than the economy since 2009-10.
  • In 2017–18, on-road diesel consumption was just over half the total national diesel consumption
  • Road freight accounts for much of the rest of this demand, with diesel being used by 99 per cent of heavy freight vehicles.

Australia’s vulnerability to fuel shocks comes from its geography, with its current only source being through maritime shipments, NatRoad says, with much of the supply coming from the Korean peninsula - 21% of the world’s crude oil flows through the Straits of Hormuz.

However, with possible regional tensions comes a risk to the supply, and with a significant widespread disruption to fuel supply would come long-term consequences for thousands of family businesses and many larger fleets, NatRoad CEO Warren Clark says.

"Simply put: without access to fuel stocks, we don’t have a road transport industry," he says.

"The country would be massively affected just within a week of a major fuel disruption considering Australia's food, water, energy, medical supplies — including the distribution of fuel itself — are all reliant on diesel/petrol."

NTRTA executive officer Louise Bilato says that, as a member of the International Energy Agency (IEA), Australia is required to hold 90 days stock that can be drawn upon in cases of "disruptions" to global oil supply.

"However, since 2012 Australia has been in breach of its international obligations as we hold 55 days’ worth of fuel imports as opposed to the 90-day minimum," she adds.

"At the NTRTA board meeting last week serious concerns were raised about Australia’s fuel security especially since remote and regional Australia, where we are, is almost entirely dependent on road transport.  We now import over 90 per cent of our fuel and that will soon be 100 per cent unless government policy changes."

WRF CEO Cam Dumesny says industry operators, including RAC WA, NRMA and even Defence Strategists have repeatedly raised the issue of fuel security, but Australia is yet to see the Government take any measures to increase fuel reserves.

"As an industry, we want to know what actions are being taken by the Government to mitigate national risk in the short term," he says.

Clark adds: "Australia’s fuel stockpiles have dwindled so much that it could affect the country’s ability to react to a crisis.

"The Government’s review into fuel stocks has to be fast-tracked as should returning Australia to holding 90 days’ worth of oil stocks.

"Any infrastructure development and maintenance should be fully funded to meet this aim. It is high time the Government takes immediate action to preserve the nation’s fuel security."

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