Australia got a scare after experts warned that the country has only been left weeks of petrol, diesel and aviation fuel in its stock following which a review of fuel security was ordered by the Australian government.
While it (the review) was the “prudent and proper thing to do”, one should not assume that the country is running short on fuel, said Australia’s energy minister, Josh Frydenberg.
At least 90 day’s of fuel reserves are expected to be retained by every country by the International Energy Agency but that target has not been met by Australia since 2012.
The latest data is available for January when the country had le4ss than 50 days worth of fuel and in comparison, that amount was double in five years ago at eth same time.
According to data from the Australian Petroleum Statistics 2018, there is 17 days of diesel left, 20 days of aviation fuel and 23 days of petrol in its emergency reserve. The remainder would come from overseas credits – a system that would allow Australia to buy from overseas if things went badly wrong.
90 per cent of its fuels are imported by Australia. Middle East is the source of crude oil which is refined and treated in refineries in South Korea, China and Singapore.
In the last 10 years, there has been an increase in Australia’s dependence imported oil, says Frydenberg because “three of Australia’s seven domestic refineries have closed and our domestic oil production has declined by a third as existing fields become exhausted”.
In case there is a major disruption of global supplies of oil, “we would have major problems within two weeks” said Australian strategist and retired air vice-marshal John Blackburn to The Australian newspaper. And because there is no plan B, such a situation would significantly impact the logistical sector in Australia, Blackburn told the paper.
The situation was “very critical when you consider the possible supply disruptions the market is currently facing”, according to Stephen Innes, Asia-Pacific Head of Trading for Oanda in Singapore.
He told the BBC that Australia “would be left scrambling as they’re literally on an island… entirely dependent on maritime supply.”
Australia would “quickly become dependent on arrangements with other economies to draw from their reserves”, said Paul Barnes, Head of Risk and Resilience at the Australian Strategic Policy Institute in Sydney.
There is no need to panic as yet, says the Australian government.
“Australia’s fuel supplies have proved to be remarkably reliable and resilient over the last four decades,” the energy minister has stressed.
There is no imminent emergency in the country because multiple sources are available, said James Prest from the Australian National University’s Energy Change Institute in Canberra.
But the government needs to take a step further, he says and adds, “a review is necessary but not a sufficient step”.
“Australia is the only IEA country which is a net oil importer and which relies solely on the commercial oil stockholding of industry to meet its 90 day obligation.”
(Adapted from BBC.com)