The Australian government took another step towards ensuring self-sufficient domestic fuel supply this week by providing three oil refineries with an $83 million lifeline.
Announcing the aid package on Dec. 14, Minister for Energy and Emissions Reduction Angus Taylor said the federal government accelerated its support package for local oil refineries to secure fuel supplies for all the industries that are dependent on a secure, reliable supply of fuel.
“We’ve been lucky in Australia. We have had reliable, secure fuel,” Taylor said. “But we have to be in a position where, under any scenario, we are able to supply that crucial fuel for all Australians. Our refineries are a crucial part of providing that supply of fuel.”
To this end, the federal government will be providing the refineries with a temporary refinery production payment starting from Jan. 1, 2021. This payment will run for six months and is worth an estimated $83.5 million.
Set at a minimum one cent payment for every litre of fuel (petrol, diesel, and jet fuel) produced, the major domestic refineries are eligible for the payment as long as they agree to operate for the duration of the program and pledge to have an open book process with the federal government.
The refineries will also need to discuss long-term self-help measures to further inform the development of the long-term package which will start on July 1, 2021.
Scott Wyatt, the CEO of Viva Energy Australia, welcomed the announcement and noted that the COVID-19 pandemic had placed a lot of financial pressure on the industry due to the reduction in demand for products like jet fuel and petrol, and this had left the industry with a great deal of uncertainty.
“To come into Christmas with a package which gives us certainty through the beginning of next year and a pathway to long-term viability, … is just fabulous Christmas present for our business and for everyone here at Geelong who have worked incredibly really hard through the course of this year to keep fuel supply to the country, despite the challenges we have faced,” Wyatt said.
The package is expected to help the industry withstand the economic shock of the COVID-19 pandemic and generate up to 1000 jobs. It is also expected to protect workers in the fuel sector and industries that rely on fuel including manufacturing, agriculture, and transport.
“It’s absolutely crucial that we have a secure supply of fuel in this country, whether you’re a farmer trying to get your harvest off, if you’re a truckie that’s got to move a container between our capital cities,” Taylor told 4BC Radio on Monday.
“Our essential services rely on having access to fuel, and that means having access to fuel in situations where there is a threat to our fuel supply,” he said.
Taylor noted that refineries were the best possible avenue for fuel security in Australia preferably from our own crude oil fields in areas like Bass Strait and Cooper Basin.