Australia to release nearly 20% of fuel stockpile as Bowen insists country ‘nowhere near’ running out | Business

Australia will begin releasing its stockpile of fuel after the government directed fuel companies to release nearly a fifth of reserve petrol and diesel supplies.

The energy minister, Chris Bowen, acknowledged fuel supplies could face further pressure but ruled out a cut to the fuel excise or rationing fuel purchasing.

Bowen said he had cut fuel companies’ minimum stock obligations to about 2.2bn litres of diesel and 700m litres of petrol respectively, freeing up about 500m and 300m respectively to be directed towards regional Australia.

The fuel would not be released immediately and Bowen said he could not be sure when fuel would reach regional Australia, where some places no longer have access to fuel, “because it’s a big country and every town is different”.

The stockpile rundown would be Australia’s contribution to the international community’s agreement to release 400m barrels of fuel, agreed by the International Energy Agency on Wednesday.

Bowen said petrol usage had not changed but demand for petrol and diesel had doubled across Australia. He acknowledged a prolonged US war on Iran could put more pressure on petrol suppliers but said the country was “nowhere near” running out of fuel.

“Will there be further threats to fuel suppliers, if the international circumstance continues to worsen – of course,” he said.

Fuel supplies had continued to arrive in Australia and 80% of the reserves, or the minimum stock obligation, remained in place, he said.

The federal government on Thursday announced it would allow lower-quality petrol with more sulfur to be used on Australian roads but did not change the standards for diesel.

The opposition’s energy spokesman, Dan Tehan, called for Bowen to consider lower fuel standards for diesel.

“He did it for petrol,” Tehan said. “Should he do the same for diesel? Australia’s economy runs on diesel.”

The National Farmers’ Federation and One Nation have called for the government to ration fuel supply in the cities to ensure regional areas would continue to ahve access.

Bowen ruled out adjusting the fuel excise and said the government was not contemplating fuel rationing, though there were federal and state powers to do so.

“What we’re doing is to try to increase supply for everyone,” he said.

Australia in early March held more than the minimum reserves, with nearly 3bn litres of diesel and 1.5bn litres of petrol. If companies released all the fuel in reserve down to the new minimums, they would release 800m litres of petrol – about two weeks’ worth – and about 700m litres of diesel – a bit more than one week’s worth.