Australia pledges $7 billion for fuel reserves and government reserves

The Prime Minister Anthony Albanese announced on Wednesday that Australia will spend A$10 Billion ($7.22 Billion) to increase its national fuel stocks and create a permanent government owned fuel'reserve.

Albanese stated that the reserve of?around?1 billion litres will allow Australia to have at least 50 days worth of fuel stored onshore, protecting it from future supply shocks.

Since the start of the Middle East conflict, Australia has been experiencing localised fuel shortages.

Albanese stated that the A$10 billion package of fuel security would be the centerpiece in the centre-left Government's budget for next week.

He told a press briefing that the aim was to give Australians more confidence about protecting their energy sovereignty, not only during this crisis but also in the future.

The cost of the fuel reserve will be A$3.2 billion. The Australian minimum stockholding requirement, which requires importers and refiners in Australia to keep roughly 30 days' worth of fuel on hand, will be reduced by 10 days at a cost of A$34.7million.

Albanese stated that "our fuel security reserve will be focused on regional stockouts, and supply constraints to essential users if there is another supply crisis."

A further A$7.5 billion will be used to increase fuel and fertiliser stockpiles through loans, equity, guarantee, insurance, and price support.

Energy Minister Chris Bowen stated that Australia was one of only a few countries within the International Energy Agency without a government-owned fuel reserve.

He said: "We now have a fuel?reserve owned by the government of approximately a billion litres, which will be added to the minimum stocks that private companies must hold. This is especially true for diesel and jet fuel."

"This is?a big and positive change in the way we approach our country."

(source: Reuters)