Affordable petrol for Australian motorists has been locked in by a $2.4bn federal government plan that protects our fuel stocks from foreign supply shocks.

The plan, to be unveiled by Scott Morrison on Monday, also accelerates the onshore production of cleaner petrol to catch up to the rest of the world and ensure new foreign-made cars are available for Australian motorists.

It provides payments worth up to $2bn to Australia’s two fuel refineries over the next decade, protecting 1250 jobs including 700 at Geelong’s cash-strapped Viva refinery.

The Prime Minister said it was a key national security measure to make Australia more self-sufficient, with the plan enforcing minimum stock levels to protect the country in the event of a maritime blockade cutting off our fuel imports.

Cheaper petrol prices have been locked in by the $2b plan.

Cheaper petrol prices have been locked in by the $2b plan.

“This is a key plank of our plan to secure Australia’s recovery from the pandemic, and to prepare against any future crises,” Mr Morrison said.

Energy Minister Angus Taylor added: “Supporting our refineries will ensure we have the sovereign capability needed to prepare for any event, protect families and businesses from higher prices at the bowser, and keep Australia moving as we secure our recovery from COVID-19.”

The government expects to create 1750 construction jobs through a $302m investment for refinery upgrades required to develop ultra-low sulphur fuel by 2024 instead of 2027.

A review of petrol standards has also been fast-tracked to this year as Australia lags behind Europe, the US and China on vehicle emissions standards.

The comparatively poor quality of petrol in Australia means motorists are facing an increasingly limited choice of new cars, as manufacturers are not willing to send cleaner models here that require better fuel to operate efficiently.

“Earlier investment in Australia’s ability to produce better quality fuels, including ultra-low sulphur levels, will also improve air quality and deliver an estimated $1bn in lower health costs,” Mr Morrison said.

“Major industries like agriculture, transport and mining, as well as mum and dad motorists, will have more certainty and can look forward to vehicle maintenance savings and greater choice of new vehicle models.”

Refineries will receive up to 1.8 cents per litre when oil prices are low, with support cut off when prices are high. If the Brisbane and Geelong refineries were to close, government modelling suggests prices at the bowser would rise by 1 cent per litre.

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