John Alexander (Bennelong, Liberal Party) Share this | Hansard source

I'd like to thank the members for Kennedy and Clark for bringing this debate forward today. Fuel security has always been important, but these are probably the most fraught times for this since the seventies. Aside from the more protectionist nature of trade today and the implications on tariffs at international borders, the pandemic has tightened supply lines, and a single container ship wedged in the Suez has shown us how dependent global trade is on a few small choke-points. This debate really does matter. It also couldn't be more timely. On the weekend, I saw fuel at $2.28 in Sydney. Clearly, fuel shocks are real.

While I don't agree with all of the protectionist measures in this motion, there are certainly some elements which are critical and should be addressed immediately by the government. The call to stockpile six months fuel supply is vital to ensure we can keep moving, even in a crisis. I am pleased to see that the government is acting on this. We are securing a baseline level of key transport fuels to be kept onshore to act as a buffer against supply shocks through the implementation of a minimum stockholding obligation. This will see a 40 per cent increase in our local diesel stocks. But, when prices stabilise again, we must invest in fuels to ensure that we have domestic storage.

Beyond the need for storage, sovereign manufacturing capabilities are also essential, which is why the government is ensuring that we have access to the fuel we need to keep Australia moving. We have already locked in Australia's refining capacity and its 1,250 employees through the landmark Fuel Security Act. This means that the Ampol refinery in Brisbane and the Viva Energy refinery in Geelong will both remain in operation until at least mid 2027. In fact, the Viva Energy refinery at Geelong in Victoria has extended this commitment until 30 June 2028, one year more than the minimum required period under the Fuel Security Act 2021. Locking in our refineries is a matter of national security, of Australia's sovereignty and our self-sufficiency at critical times, our resilience, and our resilience as a nation. It means that we continue to have the ability to refine domestic crude oil in times of emergency.

We are investing in our refineries through the fuel security services payment, which recognises the vital role that refineries play in our long-term fuel security. The payments are designed to ensure that refineries are supported in downtimes, not when they are performing well. Due to reduced demand, the pandemic resulted in a surplus of fuel products, particularly jet fuel. With the demand dropping by over 80 per cent, refineries faced challenges in reducing the production of petrol and jet fuel while maintaining diesel production. The first quarter of the fuel security services payment has now been finalised by the government, with payments well below the maximum support available. For quarter 1, 2021-22, Ampol will not receive any payments, as their payment rate is zero cents per litre. The results demonstrate the fuel security payment system is working as intended, with refiners only receiving support from the government when refinery market conditions are poor. In the case of Ampol, their margins have rallied to such an extent that they do not need any support. Viva's margins are also improving, with the payments well below the maximum available. This is the economically responsible way to support domestic industry.

I'm pleased to see the government has remained committed to domestic refining. It is not too long ago that most states had their own refinery, and, while the companies operating them saw business sense in moving offshore, it is good to see that the government has acted to ensure that not everybody has left the market.

While Australia's fuel supplies have remained secure and affordable through the pandemic, we know we need to shield Australians from potential shocks in the future and enhance our national security in the process. Our economy relies heavily on energy and liquid fuels, and this will continue to grow. (Time expired)

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