Morrison government's post-budget $2.3bn fuel security fill-up
The federal government chose Monday to release an announcement that it would sure up Australia's two remaining fuel refineries with a $2.3 billion commitment, declining to announce it in the budget last Tuesday night.
The government has assured FlowNews24 the spending was provisioned in the budget, but 'not for publication' due to 'commercial in confidence' reasons.
Wayne Phillips reviews the government's announcement with FlowNews24's Rikki Lambert in this podcast episode - the article continues further below.
Australia's fuel security has been a running controversy for the Liberal-National government, with backbench (and now critically ill with cancer) New South Wales senator Jim Molan exposing that Australia at times has had only 3 weeks' fuel stored on-shore to meet domestic demand.
As a signatory to an agreement with the International Energy Agency formed in the 1970s after the global oil shock, Australia is obliged to retain 90 days of fuel storage to meet domestic demand.
Australian governments have found creative ways to avoid controversy over its 9-year breach of the 90-day rule, getting as high as 55 'IEA' days in recent oil accounting.
The most recent method has been to spend $94 million purchasing storage space in the United States' strategic reserve, half a world away from Australia.
Some of the primary sources of Australia's fuel are Singapore, South Korea and Malaysia, all of which could become problematic if military tensions with China grow in the South China Sea and southern Asia.
One reason Australia's refining capacity has significantly declined has been Australian national, state and territory government restrictions on international and domestic travel due to the COVID-19 pandemic. Where once Australia had 5 refineries, it is now down to two, both of which receive the lion's share of government funding under Monday's announcement.
Whilst the funding is about securing jobs and refining capacity, the questions of Australia's storage capacity and priority on extracting refinery-quality oil from Australian reserves remains outstanding.
FlowNews24 has approached the Australian government for comment on the reason for the timing of the announcement on Monday, and not in the preceding budget.
The public reception of the federal budget might have been adversely affected if Monday's announcement focused on fossil fuel reserves had been made contemporaneously with the budget's climate change focused spending initiatives.