The Albanese Government will maintain maximum flexibility in the domestic fuel market, by extending the temporary relaxation of the baseline Minimum Stockholding Obligation for petrol and diesel for a further three months.
This precautionary action will continue to allow suppliers to hold 20 per cent less diesel and petrol in reserve if they commit to delivering more fuel into the domestic market and regional supply until 30 September 2026.
These are the stocks of fuel held in Australia, which must be maintained each week by bulk importers and refineries.
Australia's domestic reserves have hit record levels in recent weeks, as fuel continues to arrive as expected and demand returns to normal levels. Fuel secured through Export Finance Australia is adding a further buffer to our fuel security.
Since March, the temporary reduction has been critical in addressing supply chain crunches cause by unprecedented demand, especially in regional Australia. This measure provides ongoing flexibility for industry to respond quickly in the event of another significant spike in demand.
Our healthy domestic stockholdings have given Government confidence that a three-month extension strikes the right balance of keeping fuel reserves in good supply, while maintaining flexibility in the local market should global fuel market conditions deteriorate.
We continue to see expected ships arrive in our ports but the ongoing closure of the Strait of Hormuz continues to disrupt global fuel markets and those impacts are flowing through to Australia, in higher prices and some supply uncertainty.
Even once shipping resumes, the return to normal of the global flow of fuels and goods will take months.
Building on the original reduction, companies will only be allowed to continue to relax their storage obligations if they provide and implement a new written plan which demonstrates:
- They will continue to work closely with the Commonwealth, States and Territories to prioritise and facilitate supply to regional, agricultural or maritime consumers who could face shortages of supply;
- They will continue reasonable supply to regional distributors and wholesale spot markets (noting these were vulnerable to supply chain disruptions when the crisis started);
- They will respond to any unusual surges in demand to assist in preventing disruptions to supply and provide prompt notice of any such disruptions (new requirements for this extension).
The Government has notified states and territories of this extension.
The conflict in the Middle East is having a substantial impact on Australian motorists and businesses and we're taking decisive action to address this issue.
Australia remains at level 2 of the national fuel security plan with a current fuel outlook that is secure.
Our work to secure more fuel and build resilience in our fuel sector is already making a meaningful difference. We will continue to respond to this global crisis in Australia's best interest.
