Peter Costello (Higgins, Liberal Party, Treasurer) Share this | Hansard source

I thank the honourable member for Kennedy for his question. Australia is not self-sufficient in oil. We import oil. We import the majority of our oil, which is why we are a price taker on international markets. If we were self-sufficient, it might be different, but we in fact are in the same position, more or less, as the Americans are, which is that we are price takers. Our oil predominantly comes from the Middle East, although it can usually be refined in Australia or, most likely, in Singapore.

In relation to alternative fuels, the very high price of oil and petrol is making alternative fuels more commercial all the time. One of the things that this government has put in place as part of its long-term energy white paper is a preferential arrangement for excise on biodiesel, on LPG and on other alternative fuels. Can I also say that the government has in place grants to people for biodiesel and ethanol projects. I believe it is about $50 million which has been given out and expended completely to people who have those projects. I also indicate that the government has recently taken steps to reassure the market in relation to ethanol blends. Ethanol blends were taken off the market some time ago as a result of scare tactics principally coming out of the Labor opposition, but the government has put in place measures to reassure people in relation to blends. I believe that high oil prices will in a market sense make alternative fuels more commercial and that, particularly with preferential taxation, we will see the development of this industry, and that in fact will be a good thing.

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