Australia will establish a strategic fuel reserve to safeguard supplies in times of crisis, as the federal government seizes on record low oil prices.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
Energy Minister Angus Taylor says the reserve would initially be stored in the United States because Australia's storage facilities are full.
"In the event there is a global disruption that slows fuel supplies moving around the world, we will get access to the fuel we need to keep our country going," he said on Wednesday.
Truckies have slammed the decision to store Australia's emergency fuel in the US.
Australian Trucking Association chair Geoff Crouch said it put the country's national security at risk, with the fuel taking too long to reach Australia if it were desperately needed.
"No fuel means supermarkets would go empty, medicines wouldn't get delivered and rubbish bins wouldn't get emptied," he said.
Labor leader Anthony Albanese said the fuel should be in Australia, with the government breaching international regulations by keeping it overseas.
"Having something in the United States doesn't provide for our national interests," he told ABC on Wednesday.
"If there's the sort of international conflict or issues that provide disruption ... then that is why nation states need to have this fuel capacity."
The government will spend $94 million to kickstart the strategic reserve designed to lower Australia's exposure to major supply chain disruptions.
"Now is the time to get in and start building the strategic fuel reserve," Mr Taylor said.
"We now have the historically low prices that allows us to do this and to do it in a way which is attractive for the taxpayer."
Discussions between the government and private sector are ongoing about building more storage capacity to house the fuel reserve in Australia.
The government would also look to relax fuel quality standards to help refineries process unused stockpiles of fuel to free up storage space.
Mr Taylor said more onshore storage was a long-term goal.
"I signed an agreement with the United States to access their reserves simply because we don't have the storage space here in Australia right now," he said.
It is estimated the cost of building more storage in Australia could be in the billions.
Mr Taylor said Australia had between 20 and 30 days worth of fuel on home soil but the figure was 50 to 80 days across the whole supply chain.
Australian Associated Press
