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Morrison Government has dropped the ball on fuel security

January 14, 2019 12:33 PM


The Maritime Union of Australia (MUA) has again drawn attention on the Morrison Government’s stubborn refusal to act on fuel security after years of warnings, with new figures showing Australia now has just 22 days of petrol and 17 days of diesel at its disposal.

Australia has been non-compliant with the International Energy Agency’s 90-day fuel stockholding obligation since March 2012 and the Morrison Government has since ignored several key reports.

For example, a National Energy Security Assessment was announced last April. It was sparked by concerns over declining domestic production, diminishing refining capacity and concerns over potential flashpoints in the Middle East, South China Sea and Korean Peninsula.

However, nothing has been done since then and a report in today’s Australian newspaper said the new figures have again sparked warnings from Coalition MPs and security experts that the nation is dangerously exposed if a major geopolitical upheaval disrupts existing supply routes.

The newspaper said experts have also criticised a government move to spend more than $20 million buying supplies held offshore to bolster the national reserve, saying the move will do little to boost the resilience of the domestic fuel stockpile.

MUA National Secretary Paddy Crumlin said a number of inquiries and reports in recent years have focused on the important issue of fuel security, including the MUA’s report titled ‘Australia’s Fuel Security – Running on Empty’ in December last year, written by shipping expert John Francis.

“The Senate has held inquiries into both fuel security and tax avoiding flag-of-convenience shipping, while the Energy White Paper and Defence White Paper also investigated our increasing reliance on foreign fuel,” Crumlin said.

“It’s doubling up on the governments initial policy negligence in allowing Australia to lose its refinery capacity of oil we own and is sourced in our country, and then allow tax avoidance and dodgy shipping governance to replace our domestic shipping capacity. No one has been at the wheel of energy security in Canberra for a very long time. It’s a joke with very few laughs for Australian jobs, economic independence and long term planning”

“In addition, the ‘Running on Empty’ report found that Australia now relies on the equivalent of almost 60 full-time fuel import tankers to keep us supplied with petrol, diesel and jet fuel, which is now all carried on the international spot market, mainly from Korea, Singapore and Japan.

“The report found Australia’s reliance on foreign flagged tankers removes any opportunity for the Commonwealth to be able to requisition national flag tankers if necessary to secure minimum import or coastal distribution requirements following major economic or geopolitical disruptions.

“The cost of addressing this risk is comparatively low: even carrying Australia’s entire import volume on a fleet of Australian tankers would cost less than one extra cent per litre.

“The Australian government needs support as a matter of urgency a number of Australian tankers as part of a national strategic fleet to ensure that some level of supplies can be maintained in the event of a crisis.

Crumlin said there are now no Australian-crewed tankers supplying fuel to our nation, down from 12 in the year 2000. At the same time, the number of refineries has halved to four. This means we now import more than 90 per cent of our fuel and that number is rising.

“Australians would expect our Government to have a better plan and this would involve more refining here and Australian-crewed ships to carry it around the coast,” Crumlin said.

“This isn’t only a matter of fuel security but also national security. Unlike Australian seafarers, foreign crews have no background checks yet they are carrying petroleum products, ammonium nitrate and LNG around the Australian coast.

Read the MUA summary report here

Read the full report here