Ensuring Australia’s fuel security is the goal of a $211 million federal government plan to build new domestic storage facilities while keeping local refineries open.
The Morrison government hopes the plan also keeps prices down and creates 1000 jobs.
The initiative will form part of the government’s October 6 budget.
Energy Minister Angus Taylor has acknowledged it takes time to build storages, and the details of the plan were being finalised.
The government was preparing for worst-case scenarios like a disruption to fuel imports.
“That is where we need to make sure we have stocks onshore in Australia,” he told reporters in Sydney.
Mr Taylor also stressed the importance of having multiple sources of fuel to reduce risk.
“We have done well but we need to make sure we can continue to do well into the future.”
Prime Minister Scott Morrison said Australia’s fuel security was essential for national security and that the country had been fortunate not to have experienced a significant fuel supply shock in over 40 years.
“Fuel security underpins our entire economy,” he said in a statement.
“Not only does it keep Australia moving, the industry supports thousands of people across the country and this plan is also about helping keep them in work.”
Mr Taylor said Australian refineries were under significant financial pressure amid the pandemic and the government was committed to working with the sector to ensure it has a long-term future.
The package includes $200 million in a competitive grants program to build an additional 780 million litres of onshore diesel storage.
Labor’s energy spokesman Mark Butler is concerned Australians will pay for the plan through higher prices at the bowser.
“What we’ve got again is a big announcement with precious little delivery,” he told reporters in Adelaide.
“There is nothing in this plan that is going to deliver long-term certainty to Australia’s refining industry.”
Oil market expert Lurion De Mello from the Macquarie Business School says the announcement has provided no clarity for gasoline.
“Diesel has a bigger share in mining, agriculture and used as a backup in energy generation,” he said.
“We need to make further inroads in introducing renewable energy solutions to the agricultural sector which relies on 90 per cent diesel usage.”