A government-owned fuel reserve of about a billion litres will be established thanks to a $10 billion fuel and fertiliser security plan included in Prime Minister Anthony Albanese’s budget next week.
The Fuel Security and Resilience package will help secure Australia’s near-term fuel and fertiliser security, the government said on Wednesday.
A total of $3.2 billion will go towards building a government-owned fuel reserve of about a billion litres to increase long term diesel and aviation fuel supply.
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This will increase Australia’s critical fuel reserves to 50 days.
Another $7.5 billion will go to establishing a fuel and security facility to increase supply and storage of fuel and fertiliser.
The budget will also include 10 more days of fuel holdings through an uplift to the minimum stockholding obligation (MSO), with the support of $34.7 million over four years.
“The changes will take place progressively over time, backed by support to invest in new and refurbished fuel storage to support the uplift in fuel stocks,” the government said.
“The government will work with state governments to undertake feasibility studies into new or expanded refining capabilities, building on work with current refinery operators to retain our current refining capability in the decade beyond 2030.”
Further details about the fuel package will be released next week when the Federal Budget is handed down on Tuesday.
The announcement follows a host of fuel supply changes made by the government in response to the ongoing war in the Middle East.
This included lowering the MSO for both fuel and diesel as well as relaxing fuel standards to ensure Australians had access to enough fuel at a reasonable price.
Treasurer Jim Chalmers defended his upcoming budget on Sunrise on Wednesday morning amid mounting pressure to deliver cost-of-living relief without making inflation and interest rates worse.
There is growing speculation the government could unveil a one-off “earned income offset” in the budget worth between $200 and $300 for salaried workers.
The reported measure would add to billions already committed in cost-of-living support, including the temporary halving of the fuel excise and $1 billion in interest-free loans for businesses struggling with rising fuel costs.
Chalmers refused to confirm or deny the reports but insisted the budget would be “really responsible” and focused on managing inflation pressures.
“We know that people are under pressure,” he said.
“The (Reserve Bank Governor Michele Bullock) was asked yesterday about a hypothetical scenario where a heap more stimulus was pumped into the economy.
“That hypothetical doesn’t reflect the reality of the budget, which is all about winding back spending where we can responsibly do that.
“Governor Bullock was asked about what would happen if the government pumped a heap of extra money into the economy. We don’t intend to do that.”
