Iran’s blockage of the Strait of Hormuz has been the trigger, but the loaded gun was aimed at Australia’s fuel security well before the recent conflict in the Middle East.
For decades, successive governments have allowed Australia’s domestic refining capacity to be dismantled. The Australian-flagged tanker fleet has effectively ceased to exist. And should a proponent seek to develop new domestic oil supply, they are tied up in years of red tape and regulatory processes courtesy of the policy of net zero emissions by 2050.
By the time the Middle East conflict began shaking global oil markets in late February, Australia had already made itself structurally dependent on a very long supply chain that to succeed had to work in finely tuned synchronicity. It worked well, until it didn’t.
If you own or operate a petrol station in Australia right now, you are not just running a business — you are demonstrating how your business is a critical node for a vast amount of industry sectors and the lives of everyday Australians that depend on you. It is time the conversation around fuel security acknowledged that.
A recent survey by one of Australia’s leading public affairs and strategic communications advisors, SECNewgate Research, has revealed the high level of concern Australians have for the nation’s fuel security and what it means to their lives.
The survey of over 1,200 Australians in April found 93 per cent believe fuel availability is an immediate problem, with a similar amount (92 per cent) believing that will remain a problem into May. More than two-thirds of Australians do not see any immediate end to supply issues, with 68 per cent believing it will still be a problem 12 months from now.
Australians are looking for, and are supportive of, initiatives to reduce Australia’s reliance on fuel imports. In the face of rising fuel prices, 73 per cent of those surveyed support the development of domestic refineries and 65 per cent want to see more oil and gas drilling in Australia.
Not surprisingly Australia’s fuel security crisis has seen pessimism at the state of Australia’s economy soar, with a large majority expecting conditions to worsen in the short and medium term.
Almost three-quarters of Australians (74 per cent) expect economic conditions to deteriorate further in the short term, with 64 per cent expecting the economy to continue to slide over the next 12-months. However, the longer-term outlook over three years sees pessimism moderate somewhat with 45 per cent of respondents believing the economy will continue to worsen. However, just 35 per cent believe it will get better in the same period.
SECNewgate’s research also found that the fuel crisis is having a widespread impact on behaviour. Over half of Australians have driven less or combined multiple destinations into one trip, particularly those living in regional areas. 38 per cent of respondents reported shopping around for cheaper fuel, 26 per cent said they were using public transport more frequently, and changing (17 per cent) or cancelling (14 per cent) holiday plans.
Importantly, the long running survey recorded its highest negative result towards the net zero renewable energy transition in April, although a majority of Australians still support it. Putting aside the impact of foreign events, the policy of net zero has been a key driver in our diminished fuel security position. As has been seen to date with renewable energy and power bills, when net zero affects them personally, Australians turn against it.
The federal government’s message is that Australia’s supply is “strong and secure.” But it is clear from this research that everyday Australians do not share this sentiment.
As I wrote last month, now is not the time for kneejerk regulatory action by governments at all levels, which adds time and cost to running businesses with no discernible benefit to consumers who are alive to the fact Australia is facing a very real, and protracted, crisis.
The ACAPMA team has been engaged with all levels of government to ensure that the decisions taken regarding this crisis are shaped with the input of petroleum wholesalers, distributors and retailers; ensuring our customers are not burdened with the additional expense poor policy inevitably brings.
When all is said and done, Australia stops when there is no fuel in your bowsers. What the events of the past months have shown is that fuel security can no longer be treated as an abstract discussion point, rather that it is central to everything we do.
ACAPMA
