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- The Federal Government hasn’t ruled out taxing Australians more in order to secure the country’s long-term fuel supply and domestic fuel industry
- Energy Minister Angus Taylor has announced a $211 million package to build more oil storage facilities in Australia
- The facilities will store 780 million litres of diesel, with the Federal Government previously buying $94 million worth of U.S. crude oil
- He’s also flagged a “refinery production payment” to help Australia’s remaining four oil refineries to stay open
- One of the four remaining refineries, Viva Energy, revealed it was close to shutting its doors as COVID-19 decimated its balance sheet
The Federal Government has committed to securing Australia’s long-term fuel supply and wider domestic fuel industry — but it will likely come at a cost to taxpayers.
Energy Minister Angus Taylor has announced a $211 million package, which will be part of the next budget, to boost the country’s fuel security.
The majority of the funds will be used to build more oil storage facilities in Australia, with a goal of creating 780 million litres of diesel storage. The Government has already bought $94 million worth of U.S. crude oil.
The money will also help create a minimum stockhold obligation for key fuels and a detailed market design process for a refinery production payment.
Tax increase?
No details of the refinery production payment have been released just yet, with the Government to spend six months consulting with the wider industry.
But, a recent report commissioned by the Australasian Refineries Operatives Committee argued a small increase to the petrol excise rate would help keep Australian oil refineries open and also build additional fuel storage facilities.
“These refineries support well-paid, highly-skilled blue-collar jobs in areas that desperately need them. Our governments can’t afford to shed 5000 of these jobs in the middle of this crisis,” AROC Chair Mick Denton said.
“A shutdown of the local fuel refining sector would see a direct contraction of $6.7 billion — that’s 0.36 per cent of GDP,” he added.
The Australian Workers Union has also backed the report and welcomed a possible increase to the petrol duty, warning Australia’s oil refineries will be forced to close without further support.
“Australians may baulk at the thought of paying more at the pump, but we actually have some of the cheapest petrol on the planet,” said AWU. National Secretary Daniel Walton said.
“A 1.12 cent a litre rise is a small price to pay to ensure we have enough fuel to last more than three weeks,” he added.
Government plan
While the Federal Government haven’t committed to raising the so-called fuel tax, they have promised to prioritise keeping Australia’s four remaining oil refineries open.
The pledge comes as one of the four, Viva Energy in Geelong, revealed the fall in global demand for oil and COVID-19 related shutdowns in Victoria had left it close to shutting.
Energy Minister Angus Taylor said Australian refineries are not only a huge source of employment, but also helps keep fuel prices low for all Australians — with data showing fuel would rise one cent per litre if the refineries shut.
“Refineries play an important role in securing Australia’s fuel security and putting downward pressure on fuel prices for consumers,” his office said in a statement.
“Modelling has shown that a domestic refinery capability is worth around $4.9 billion (over 10 years) in value to Australian consumers in the form of price-suppression,” the statement concluded.
It seems regardless of whether Australian oil refineries can stay open, consumers can expect to pay more at the bowser.
