The Malinauskas Labor Government has secured a strategic reserve of up to 20 million litres of diesel to boost South Australia's fuel security and support the state's primary production sector.
The State Government has reached a commercial agreement with bulk fuel supplier IOR to source and store the state's diesel reserve using spare capacity at IOR's existing storage facility at Port Bonython in the Upper Spencer Gulf.
The Government will purchase and store 10 million litres of diesel immediately, with an option to secure and store up to 20 million litres, with an ability to further source and refill this storage if the State elects.
This arrangement has been structured to complement the broader fuel market, not compete with it. The facilities at Port Bonython currently have capacity to hold the reserve, and the proposal is adding to supply from Singapore, not redirecting it from other sources.
The immediate benefit of the South Australian reserve is also designed to complement the Australian Government's more than $10 billion Australian Fuel Security and Resilience package.
While that package will see the establishment of a permanent government-owned reserve of more than a billion litres and ensure at least 50 days of fuel supply and storage of diesel and aviation fuel, the South Australian fuel reserve will provide an additional buffer if supply deteriorates in the immediate term and while the impacts from the Middle East conflict remain uncertain.
While petrol, diesel and jet fuel continues to arrive in South Australia at significant volume today, the South Australian fuel reserve would stand ready to be made available to direct quickly to areas of need, in accordance with the National Fuel Security Plan.
IOR has an established track record in the oil and gas sector, with proven capability across supply chains, logistics and fuel distribution.
The Malinauskas Labor Government has led the nation in securing energy supplies for domestic consumption, securing a long-term domestic gas supply agreement with Santos in February, ensuring gas currently sold overseas will instead be used in South Australia and help underpin the transformation of the Whyalla Steelworks.
The South Australian Strategic Gas Reserve will see Santos supply 20 petajoules of gas each year for 10 years from 2030 – the equivalent of a third of the state's entire annual gas usage across the residential, commercial and industrial sectors.
As put by Peter Malinauskas
This strategic diesel reserve will help build confidence for South Australia's primary producers as we confront the international fuel crisis.
While diesel continues to arrive on our shores, and the Commonwealth has committed to a $10 billion plan to ensure Australia's long-term fuel security, it is prudent that we invest in our own reserve to provide a buffer in the case of unforeseen events.
Importantly, this has been done in a coordinated and thoughtful manner to ensue we are not competing against the Commonwealth, or our farmers to purchase fuel.
This diesel reserve builds upon the highly significant 10-year state strategic gas reserve we announced in February before the fuel crisis, demonstrating that this is a government which takes our state's energy security seriously.
As put by Tom Koutsantonis
We first began negotiating with IOR in March in the days following the State Election.
This is a practical step to strengthen South Australia's fuel security at a time when global supply chains remain uncertain.
While the Commonwealth continues to lead on national fuel security, we are making sure South Australia is well positioned to manage any potential disruptions without competing against our primary producers.
This is an opportunity to secure additional and immediate diesel supply and storage, using existing infrastructure that is currently underutilised.
Having additional diesel available locally means greater resilience for our industries, our regions and our essential services.
As put by IOR CEO Drew Morland
This is a practical example of how industry and government can work together to deliver timely, targeted solutions that benefit communities and critical sectors.
As a proudly Australian business, with 87 per cent of our sales volume taking place across regional and remote Australia, we are a natural partner to support government.
The strategic location of Port Bonython is significant not only for South Australia but for national fuel security. It supports key industries across the Upper Spencer Gulf and Eyre Peninsula, including agriculture, as well as the mining sector that helps power the Australian economy.
We are committed to contributing to Australia's long-term fuel resilience by deploying our infrastructure and expertise where it is needed most.
We applaud the Premier's approach to fuel security for South Australians and look forward to continuing to work with all levels of government.
