Australian government to pay for private sector fuel shipments amid global supply shocks

Bunnings is running low on jerry cans, Anthony Albanese says, as he labels fuel hoarders un-Australian and announces the government will underwrite the private sector to guarantee fuel shipments into Australia.

Speaking in Sydney on Saturday, the Prime Minister revealed new legislation would be introduced on Monday to allow the underwritingand deliver “shiploads” of fuel.

Images circulating widely online this week showing people filling up multiple Jerry cans of fuel, and Mr Albanese branded these suspected hoarders as un-Australian.

“That’s not the Australian way. People need to take what they need, and no more,” Mr Albanese said.

“I was with the head of Bunnings just last week, and had a discussion with him; they’ve run out of jerry cans.

“That’s not sensible. People need to act responsibly at this time.”

However, NewsWire has been told Bunnings is running low on 20L cans in some stores, but has adequate stocks of smaller cans across its 300 stores.

The federal government will introduce amendments to the Export Finance and Insurance Corporation Act, to formalise the commonwealth’s ability to underwrite additional cargoes and strategic reserves.

“The deal making expertise of Export Finance Australia will allow them to enter contracts of insurance or indemnity, give guarantees, make loans, or enter arrangements needed to help secure fuel supply from international markets,” information from the Prime Minister’s office says.

“The Fuel Security powers help to address (price rises and shortages) by giving suppliers confidence to secure additional and discretionary cargoes – which will be used to service uncontracted demand, including regional and independent fuel suppliers,” the additional information says.

Six of 81 fuel shipment arrivals for April were cancelled but those shipments had already been “more than” replaced, Mr Albanese said.

“This is a war that is across the other side of the world, but it’s having a real impact here, as it is, in every nation,” he said.

“Here, people in local communities, farmers, small businesses, miners, are all being impacted. And if you go to your local petrol station and there’s no fuel, that causes understandable distress.

“I want to keep our people, our economy, and our nation moving.”

The underwriting scheme would also help lock in fertiliser deliveries; shortages of which are compounding fuel shortages in the regions and threatening food supply.

“Put simply, we will use Export Finance Australia to underwrite the purchase of shiploads of fuel that will add to supply here in Australia,” Mr Albanese said.

“This support from the government will not be business as usual. It has to be additional supplies that are available on the international market.

“And it literally will be underwriting the purchase of shiploads of fuel to get here to Australia.”

Energy Minister Chris Bowen has been pushing the fuel companies to be more transparent with their supply and delivery data, given hundreds of service stations are empty but no fuel shipments to Australia have been missed since the war in Iran began.

Australia now has 39 days of petrol, up slightly on the pre-conflict reserve, and 30 days of diesel and jet fuel which hasn’t changed since February 28.

“What that tells me is that, while the fuel is flowing strongly out the door, especially to regional Australia, it also continues to flow in the door.

“Every expected arrival has arrived, and our international supply chain remains secure at this point … That’s important to reassure Australians,” Mr Bowen said.

In a sign the fuel companies are sharing more information with the government, the Minister said since the government released 20 per cent of its strategic reserves, “one provider” had provided an additional 20 per cent to go to farmers and regional communities which are out of fuel.

“Another provider” has sent an extra 1200 kilolitres of diesel to a regional distributor, and another unnamed provider had delivered an extra 400 kilolitres to Dubbo in NSW in the midst of seeding season on farms.

While many people fixate on the service station price, publicly available data shows the fuel costs for independent retailers are rising massively.

Independent service stations fill their tanks by buying on fluctuating spot prices; Australian Institute of Petroleum figures show the spot price – the terminal gate price – hit 311.1c per litre of diesel in Sydney on Friday, 310.5c in Melbourne, and the highest was Darwin with 315.1c.

On Friday, unleaded petrol spot prices were 246.7c in Melbourne and Brisbane, and 246.4c per litre in Sydney.

“We know that demand, particularly in rural Australia – because agriculture is at a very busy time – remains exceedingly high, and the supply is still not enough,” Mr Bowen said.

“But we are increasing supply and working in a very complicated supply chain to get the fuel where it needs to go.”

International fuel shipments are available but getting more expensive and risky with fluctuating oil prices, Mr Bowen said.

“So companies who do want to order more cargoes, in the national interest, are also facing very difficult decisions. That’s the national interest; that cargo comes to Australia … we want to help the companies make the decision to buy those cargoes,” Mr Bowen said.