In short:
The federal government will underwrite fuel imports to ensure shipments continue when private suppliers cannot secure them during global disruptions. The move is aimed at preventing shortages, not lowering prices.
Expanded Powers Set to Improve Supply Security
The Albanese Government will introduce legislation next week to expand its ability to support fuel imports, allowing it to underwrite shipments where private suppliers cannot secure supply on commercial terms.
The amendments to the Export Finance and Insurance Corporation Act will enable Export Finance Australia to provide guarantees, insurance, loans and other financial backing to fuel suppliers sourcing cargoes from international markets.
The Government said the powers will be used to secure additional supply to address shortages and gaps, particularly in regional areas, and will not replace fuel already under contract.
Australia relies heavily on imported fuel and sits at the end of a long global supply chain, leaving it exposed to international disruptions in both supply and price.
The Government has pointed to increased global demand during the current conflict as a key driver of pressure in the market.
Earlier in the conflict, weeks ago, the federal government moved to release around 20 per cent of its strategic fuel reserves into the domestic market to ease supply pressure.
Fuel standards for petrol and diesel were also lowered to increase available supply.
At the start of the Middle East conflict about a month ago, Australia held around 35 days of fuel in reserve, well below the 90 days recommended by the International Energy Agency.
Reserves Still Well Below Recommended Levels
Domestic refining capacity remains limited, with only two refineries operating nationally, reinforcing Australia’s dependence on imported fuel rather than sovereign supply.
The new powers allow the Commonwealth to step in where suppliers are unable to secure additional cargoes, providing financial backing to bring fuel into the country.
The Government maintains that near-term supply remains stable but has warned the longer the conflict continues, the greater the potential impact.
The fuel excise remains unchanged at around 53 cents per litre. Despite calls to cut the tax — including from the Victorian Opposition — the Albanese Government has not committed to any reduction.
For motorists, the changes are aimed at maintaining supply rather than lowering prices. Fuel costs will continue to reflect global market conditions.
In growth areas like Wyndham, where most residents commute outside the municipality for work and rely heavily on their cars, the situation has sharpened concerns about preparedness.
With limited reserves, reduced refining capacity and continued reliance on global supply chains, the system remains exposed to further shocks, with few immediate options to ease costs at the bowser.
