Many readers will be aware that there is currently a national debate surrounding Australia’s adherence with the IEA’s International Energy Programme (IEP), with much of it arising from a report produced by John Blackburn AO on behalf of the NRMA.

As a signatory to the IEP, Australia is obliged to ensure that national oil stocks comply with the requirement for the country to maintain oil stocks above 90 days of the net oil imports in the preceding year.

As Australia’s refining capacity continues to decline with the closure of Kurnell in NSW, this debate is becoming more pertinent.

While ACAPMA recognises that this debate is a significant national issue, we are concerned that the scope of this debate appears to be narrowly focused on security issues alone.

ACAPMA CEO Mark McKenzie suggests that “the nature of the current fuel supply debate centres on the macro element of the debate (i.e. national security), focusing solely on the characteristics of supply between Producer and Port”.

“Importantly, the current national discussion does not take due account of the additional need to ensure reliable and competitive supply from Port to Pump,” Mark said.

ACAPMA believes that the scope of the current debate – particularly as it relates to the issue of access to national storage and transmission infrastructure – should be extended to incorporate consideration of supply vulnerabilities within Australia’s borders and the potential for these vulnerabilities to result in:

  • interruption of supply for local and regional communities within Australia; and/or
  • regional shortages in supply that, in turn, may produce price spikes in discrete geographic regions with consequent negative impacts on fuel affordability.

“While the bigger debate about the security of imported fuel is an important one, the point of maintaining good national fuel stock levels is meaningless if this stock is not close to the points of consumer demand – that is, all of them,” Mark said.

Mark went on to state that “there has been a number of events in recent years where cities such as Perth and Melbourne have experienced short supply. Our concern is to ensure that these vulnerabilities in the fuel supply chain (i.e. Port to Pump) are properly considered in the wider national debate about transport fuel security.

“The debate is not simply about whether we have enough fuel storage in this country – it is about ensuring that location of this storage is strategically based as close as possible to the key areas of metropolitan and regional fuel demand,” Mark said.

“This is one area where the consumer’s interests and the fuel retailer’s interests are the same. If a service station runs out of fuel then they lose income, and their customers lose the opportunity to purchase the fuel they need,” said Mark.

“Accordingly, this is a debate where it is in our collective interest to get it right. We need to ensure that all of Australia’s local communities – whether they are located in our capital cities or remote rural areas – get access to a reliable and competitively priced fuel supply”.

ACAPMA is currently discussing this issue with Federal Government agencies and interested stakeholders with a view to suggesting practical strategies for addressing the characteristics of total fuel supply – from Producer to Port and then from Port to Pump.

If you are aware of a specific areas where shortages in supply are more frequent than desired then ACAPMA would like to hear from you via assist@acapma.com.au or call us on 1300 160 270.

 

 

 

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