Representatives from GrainCorp, IFM Investors, and Ampol, together with Federal Treasurer Jim Chalmers and Minister for Industry Chris Bowen, at Ampol’s Lytton site last year. File photo: Ampol

THE Federal Government has today announced that fuel with sulphur levels in excess of normal standards will temporarily be made available in Australia.

The move has come in response to a shortage of fuel in some regional areas as the result of the throttled supply of fuel coming out of the Middle East, where conflict between Iran and US-Israeli forces has effectively closed the Strait of Hormuz to shipping.

“In order to assist with getting more supply, and secure downwards pressure on prices, I am temporarily amending Australia’s fuel quality standards to allow higher sulfur levels for the next 60 days,” Minister for Climate Change and Energy Chris Bowen said in a statement.

“This will allow around 100 million litres a month of new petrol supply that would otherwise have been exported to be blended instead into Australian domestic supply.

“In return, Ampol Australia has committed to ensure this redirected supply will be prioritised for regions of shortage and for the wholesale spot market that supports independent distributors and harvesters.”

Mr Bowen said while Australian fuel consumption has not changed, this additional volume will help relieve pressure on distribution chains disrupted by elevated demand.

“The government has been unequivocal – this additional supply must help the people who need it, including farmers, fishers and regional communities.

“I can also confirm that the National Coordination Mechanism will continue to convene to respond to emerging fuel supply chain issues.”

By bringing together all levels of government, the National Coordination Mechanism will work on supply chain issues, including alleviation of bottlenecks, across Australia.

“This builds on a suite of measures we have already taken to secure supply and put downwards pressure on fuel prices; we will continue to take further actions as necessary.”

Overnight, the International Energy Agency, of which Australia has been a member country since 1979, agreed to a voluntary collective action to address disruptions in oil markets stemming from the war in the Middle East.

“This means member countries are encouraged to release fuel in a co-ordinated way which helps to calm the global oil market.

“Australia, like all IEA member countries, has endorsed a global collective action…to relieve pressure, and will support our work at home.

“Australia is finalising its contribution, which would then be released directly to the Australian market.”

Mr Bowen said what contribution Australia makes will be decided in light of the national interest.

“We continue to see expected ships arrive in our ports, and we continue to act to relieve the distribution pressure we are seeing in our regions.

“It is clear there will be supply impacts if this war continues – this is the world acting to mitigate those impacts.”

Source: Federal Government