Australian motorists facing renewed pressure from volatile global fuel markets could be better protected under a new five-year agreement made with Japan this week.
The deal comes as Australia remains heavily reliant on imported petrol and diesel, which leaves the country exposed when conflict, refinery outages or export restrictions disrupt supplies from overseas.
“Australia’s oil supply is a case of just-in-time operations and can’t afford a supply failure,” he told Yahoo News Australia.
“Japan is one of the key partners for Australia’s energy security, especially for diesel.”
Paul said Australia was particularly exposed to disruptions across Asia, with much of its refined fuel coming from Singapore, South Korea, Malaysia, India and Japan.
“If our suppliers in Asian countries are disrupted, it will directly impact our supply,” he said.
“From a supply chain point of view, when both parties work together and help each other, it contributes to improving resilience.
“The long-term partnership between the two countries has never been more important than now.”
Australia turns to Japan on fuel security
Treasurer Jim Chalmers travelled to Japan this week for high-level talks, where “bolstering fuel security and resilience” was identified as a key priority alongside energy and critical minerals.
The talks resulted in a new five-year agreement establishing an annual Australia-Japan Finance Ministerial Dialogue, with fuel security specifically included among the areas targeted for closer cooperation.
“We’re strengthening economic ties with Japan and strengthening Australia’s economic security,” Chalmers said.
“Both countries have an interest in the safety and stability of our region, and a free and fair global trading environment.”
The visit marked the 50th anniversary of the Basic Treaty of Friendship and Cooperation between the countries.
Does the deal mean cheaper fuel for Australians?
Rather than immediately lowering prices, the agreement is intended to strengthen Australia’s fuel supply chains and cooperation with Japan, reducing the risk of major disruptions leading to shortages or sharper price spikes.
This means motorists shouldn’t expect to immediately see relief at the bowser.
Paul said the agreement could contribute to price stability, but ultimately Australia’s vulnerability comes down to whether it can maintain access to physical supplies of fuel.
“Only if our supply continues to improve will it put downward pressure on price,” he said.
“At this time, the price at the bowser also depends on the supply of crude oil from the Middle East.”
