Morrison government yet to release 2019 report on vulnerability of Australia’s fuel supplies

The Morrison government has sat on a report addressing the vulnerability of Australia's fuel supplies for two years, with concern mounting that its findings could stay secret for 20 years if they are not released before the election and the Coalition loses.

The Liquid Fuel Security Review's final report was presented to the government at the end of 2019. An interim report in April of that year found Australia had just 18 days' worth of petrol and 22 for diesel in storage - well short of an agreement with the International Energy Agency to hold the equivalent of 90 days of imports.

Australians have been reminded of the risk of supply interruptions following Russia's invasion of Ukraine. The war and subsequent sanctions against Russia have sent local fuel prices soaring by at least a quarter to well beyond $2 a litre in much of Australia.

Russia supplies just 1.5% of Australia's oil imports but an immediate import ban could have caused "potential fuel shortages", said Viva Energy, one of the country's two remaining oil refiners that was waiting for two shipments to land. The government gave Viva and Ampol, the other refiner, 45 days' grace before the ban kicked in.

Similarly, the shortage of a diesel additive late last year after China banned urea exports threatened to cripple the trucking industry.

South Australian senator Rex Patrick, whose freedom of information request to make the final fuel security report public was rejected in 2020, believes the government "never intended to release it".

Instead, "there's been a hodgepodge of incoherent measures that have gone nowhere near our national security obligation and our international agreement", Patrick said.

"The government claims this document is cabinet-in-confidence," he said. "In two months' time, if the Albanese government were to win government, that document will be buried for 20 years, and a Labor government would have to start over."

The final security report would probably have revealed how long supplies for "critical users" might last amid what the interim paper dubbed "new and emerging threats".

Modelling of "an extreme and unlikely scenario" in which Australia was cut off from oil and fuel imports showed local refining capacity "could support critical users for around three months", the interim report found. However, since then the number of oil refiners in Australia has reduced from four to two.

A spokesperson for the energy minister, Angus Taylor, said there had "been significant changes to the fuel market both domestically and internationally since the interim liquid fuel security review was compiled", ranging from Covid-induced demand drops through to the "current supply pressures" resulting from Russia's war.

"The Morrison government is taking strong, proactive measures to further enhance our domestic fuel security," the spokesperson said. These included subsidising the two refineries until at least mid-2027, introducing a minimum stockholding obligation to safeguard levels of key transport fuels, and increasing onshore diesel stocks by 40% with industry through a $260m grants program.

The government has also bought about 1.7m barrels of oil and stored it in the US's strategic petroleum reserve.

However, Richie Merzian, director of the Australia Institute's climate & energy program, said storing fuel offshore meant depending on ships to bring it to Australia. "In an emergency, you have to rely on the goodwill of those [foreign-flagged] carriers to honour the shipments," he said.

Up until the review, the government had little knowledge about the availability of supplies, relying on the private sector to tell them, said Merzian, who is preparing a report on fuel security.

"The federal government's been sitting on a liquid fuel security strategy, it's been sitting on [tightening] CO2 emission standards for cars," he said. "As a result, we lack choice, and we lack any effort to actually reduce our reliance on foreign oil."

Chris Bowen, Labor's energy spokesperson, said the government should have released and acted on the report years ago, not least because the Senate highlighted the problem in 2015.

"The average Australian household spends the same amount of money on fuel as they do on electricity and gas combined," Bowen said. "So it's critical we have secure supply [and try to prevent] the current crippling price shocks hurting families and businesses."

The Greens leader, Adam Bandt, said "the government's pro-fossil fuel agenda" had compromised Australia's energy security.

"Instead of making us energy independent by shifting to sun- and wind-powered electric vehicles, they've doubled down on last-century technology and left us exposed to dictators and global conflict," he said.