Applications have opened for the Boosting Australia’s Diesel Storage program, a project that will contribute to the Federal Government’s long-term fuel security goal to increase domestic fuel storage to meet industry and community needs during an emergency, and into the future.

The program is set to provide up to $200 million in competitive grants over three years to support the construction of an additional 780 megalitres of onshore diesel storage, as well as assisting industry in meeting the new minimum stockholding obligation by 2024.

The obligation will require industry to hold around 40 percent more diesel than current levels.

The program is part of the Government’s 10-year comprehensive fuel security package to increase Australia’s resilience to fuel supply disruptions, secure sovereign refining capability, and keep fuel prices low for consumers.

Australia imports 90pc of its liquid fuels, but only has enough in storage to last 54 days – well below the 90 days it is obliged to stockpile under an agreement with the International Energy Agency. Last March the Morrison government struck a deal to tap into the US government’s tightly-guarded emergency fuel reserves, a move that will help lower the risk of Australia plunging into an economic and national security crisis if supply runs low.

Increasing Australia’s capacity to store diesel stocks will strengthen Australia’s ability to manage potential supply chain disruptions.

Diesel is important to Australia’s energy security needs, as it underpins our critical infrastructure, transport and industries, an government briefing paper said. Diesel is also particularly important during an emergency for critical services.

Successful projects will receive grants of up to $33.3 million, with the Government covering up to 50pc of total eligible project expenditure. Projects are expected to start construction from mid-2021 and be completed within three years, and will target projects that enhance fuel security by being in a strategic regional location or that are connected to existing fuel infrastructure.

Applications close on 22 February.