Australia is releasing petrol and diesel from its national strategic reserves, a move triggered by escalating geopolitical tensions in the Middle East and concerns about global fuel supply. The decision, announced Friday by Energy Minister Chris Bowen, marks the first drawdown of the country’s fuel stockpiles since the onset of the war in Ukraine in 2022.
Approximately six days’ worth of petrol and five days’ worth of diesel will be made available, Bowen stated. Australia currently holds reserves equivalent to 36 days of petrol supply, 29 days of jet fuel, and 32 days of diesel, according to recent government data. The release is part of a coordinated international effort, with the 32 member countries of the International Energy Agency (IEA) collectively agreeing to release 400 million barrels of oil in an attempt to stabilize prices and ensure supply continuity.
Bowen emphasized that the fuel release wouldn’t be immediate, citing the complexities inherent in global supply chains. “The minimum stock obligation… for this purpose, [for] the rainy day, is now necessary,” he said. “There is a war. I think war ticks the boxes of crisis.”
The government has simultaneously reduced minimum reserve requirements for fuel companies. The minimum diesel reserve has been lowered from approximately 2.7 billion litres to 2.2 billion litres, whereas the minimum petrol reserve has been reduced from around 1 billion litres to 700 million litres. Despite these reductions, current stocks of both petrol and diesel remain above the newly established minimum levels, with just under 3 billion litres of diesel, and 1.6 billion litres of petrol in reserve.
Bowen indicated that he is in discussions with fuel companies to prioritize the distribution of released reserves to regional Australia. Reductions in reserve requirements are contingent upon fuel companies prioritizing regional communities.
The move comes alongside a recent relaxation of fuel quality rules, intended to add an extra 100 million litres of petrol to the monthly supply for the next two months – equivalent to roughly two days’ worth of fuel. However, this earlier measure did not address growing concerns about diesel shortages, which have been reported in some areas.
Australia, a major exporter of liquefied natural gas (LNG) and coal, is surprisingly vulnerable when it comes to oil. Rising prices are being driven by uncertainty surrounding Iran’s potential blockade of the Strait of Hormuz, a critical waterway through which approximately 20% of the world’s oil supply passes.
Bowen asserted that fuel supply to Australia remains on schedule. “When we say fuel supply is secure, that’s what we say, that’s what we mean, that’s the facts,” he stated. He acknowledged, however, that regional areas have experienced real shortages due to unusually high demand.
Opposition Leader Angus Taylor criticized Bowen’s handling of the situation, accusing him of being “asleep at the wheel.” “Chris Bowen was in denial, he told us our fuel supplies were secure. By the conclude of the week, by yesterday, we heard that we had a national crisis,” Taylor said. He cited reports from constituents, including farmers and truckers, regarding difficulties in obtaining fuel.
Bowen dismissed suggestions that fuel rationing might be necessary, stating that the government is actively managing both fuel demand and supply. “I want Australians to have access to the fuel they need, not more, not less,” he said.
