Australia’s big miners have asked the competition watchdog for permission to collaborate on fuel security strategies, and the national cabinet will war-game more drastic measures such as fuel rationing to shore up supplies as the conflict in the Middle East enters its fifth week.
However, the Albanese government and the states hope to avoid taking severe action for as long as possible by finding new ways to increase supply and encouraging people to cut back their consumption voluntarily.
The national cabinet will recommend a range of measures to mitigate the oil shock such as working from home where possible, carpooling and increasing the use of public transport as a first step.
Victoria and Tasmania announced over the weekend that they would introduce free public transport fares for one month and three months, respectively. NSW has been reluctant to follow suit because of the budgetary effect.
As the prime minister and state and territory leaders prepare to meet virtually at 10am on Monday (AEDT) to sign off on what Anthony Albanese calls light-touch measures to preserve fuel, one key business group said the best way to avoid sharp increases in food and grocery prices was to target support at the heavy transport sector.
Meanwhile, the mining industry said it would serve the national interest if the sector could collaborate on securing fuel for suppliers and contractors.
“We want to be able to talk among companies about what is going on at the moment, so we are seeking an authorisation from the [Australian Competition and Consumer Commission] to make sure we are lawful in our industry responses,” Minerals Council of Australia chief Tania Constable said.
The Middle East war has choked the global supply of oil, gas and refined fuels and prompted the ACCC to give preliminary approval for big Australian fuel suppliers such as Ampol and Viva Energy to work together to meet the country’s needs. If final approval is granted next month, they would have immunity from competition laws.
Rather than an across-the-board cut to fuel excise, which would be expensive and might increase demand in a supply constrained market, the Australian Chamber of Commerce and Industry said a temporary removal of the 32.4¢ per litre heavy vehicle road user charge would have a flow-on effect to all road users.
“For things like food and grocery prices, it will help insulate the impact … and moderate any inflationary impact,” ACCI chief executive Andrew McKellar said.
“It’s a targeted measure. It’s something that doesn’t send an artificial signal, such as what an immediate reduction in the fuel excise would do.”
While the Iran war has now lasted longer than Donald Trump’s initial four-week boast, Vice President J.D. Vance said the US had achieved the majority of its military objectives, but the war would continue “for a little while longer” to further degrade the Iranian regime.
Inside the Albanese government, a rapid de-escalation or cessation of hostilities remains the most desired outcome, but it is preparing for the worst. Albanese has cancelled a trip planned for late next month to Sri Lanka and then to Turkey to commemorate Anzac Day, so he can attend to the crisis at home.
In advance of Monday’s meeting, he has told the states he wants to avoid mandated measures or restrictions. Discussions on Sunday night included whether the national cabinet would release a set of stages that would involve increasingly drastic measures, such as purchase limits and rationing, should the war drag on.
Data released by the government on Sunday said fuel supplies continued to arrive in Australia as scheduled. Localised shortages were being caused by panic buying, especially of diesel.
As of late last week, national fuel stocks were at normal levels of 39 days of petrol, 30 days of jet fuel and 30 days of diesel supply, but at normal rates of consumption.
On Saturday, Albanese announced the government would legislate to underwrite fuel cargoes bought on the spot market to insure buyers against selling at a loss.
‘Consistency across the country’
The prime minister wants to avoid a repeat of the COVID-19 pandemic when the states all went in different directions, making the hardship for people even worse.
Health Minister Mark Butler made the point publicly on Sunday. “We want to see the highest level [of] co-ordination and consistency across the country. We don’t want to see state-by-state responses that differ across different borders,” he said.
“And we also want to see the lightest possible touch to ensure that we’re very much leaning on common sense rather than top-down mandates. These really are the lessons we learnt from the pandemic only a few years ago.”
West Australian Premier Roger Cook, the most senior of the state leaders, said he would prioritise his jurisdiction during Monday’s meeting.
“Obviously, we’ll stand up for West Aussies. We’ll make sure that we get our fair share of the [fuel] reserves, and make sure that we get the fuel that we need to keep our economy going because Western Australia’s economy is the engine room of the national economy,” he said.
He agreed there was no need yet to mandate measures.
“At this stage, we don’t see [the] need to encourage people to work from home unless, of course, that is part of the conditions that they enjoy in their workplace.”
ACT Chief Minister Andrew Barr said finding ways to increase fuel supply and reduce demand was important given the nation was about to go on holidays.
“As we head into Easter, two weeks of school holidays and the Anzac Day long weekend, work travel will likely reduce,” he said.
Extracted in full from: https://www.afr.com/politics/federal/national-cabinet-to-plan-for-fuel-rationing-but-hopes-to-avoid-it-20260329-p5zjmn
