PM confirms purchase of 100m litres of diesel in bid to boost supply amid Iran war oil crisis

The prime minister has confirmed that new powers allowing the federal government to underwrite the delivery of additional fuel cargoes have been used to purchase 100 million litres of diesel.

Under the laws, which passed parliament last month, petrol companies still buy fuel but the government takes on the financial risk of shipments that might otherwise be too expensive.

On Thursday Anthony Albanese announced that the fuel security powers had been used to purchase two shipments of diesel — totalling 570,000 barrels — from Brunei and South Korea..

“This is the first of many expected shipments secured under the government’s new strategic reserve powers, with the support of Export Finance Australia,” he said.

Mr Albanese said the conflict in the Middle East had prompted the move.

“This is welcome news, it’s a practical outcome of the engagement,” he said of recent discussions with regional trading partners.

The additional diesel was purchased by Viva Energy, the company that operates the oil refinery that caught ablaze at Geelong in Victoria.

Mr Albanese said they were “distressing scenes” but it was positive that no-one was harmed.

He said there would “clearly” be a consequence for fuel supply.

“We’ll continue to work with the company to do what we can to make sure anything that is offline is brought online as soon as possible,” Mr Albanese said.

‘No surprises’ agreement with Malaysia

Mr Albanese made the diesel shipment announcement during a joint press conference with his Malaysian counterpart Anwar Ibrahim in Kuala Lumpur.

During their meeting, Australia and Malaysia reached an agreement to engage in energy trade on a “no surprises basis”.

It marked the third agreement Mr Albanese reached with Asian nations in less than a week to ensure fuel supply continued amid the Middle East war. 

“This is a conflict that has caused unprecedented energy supply shocks right across the globe,” the prime minister said.

“We’re working together to prepare and shield our citizens from the worst of the impacts of this global conflict.

“I am pleased that we’ve agreed a joint statement on energy security. This underscores our commitment to ensuring that essential goods both food and energy continue to flow between our two countries.”

Mr Ibrahim said the world looked very different to when Mr Albanese was in Kuala Lumpur last year.

“The Strait of Hormuz has been effectively closed for nearly seven weeks, global energy markets are under serious stress, supply chains are disrupted and the consequences are pummelling through the seven seas,” he said.

Malaysia is one of Australia’s top suppliers of crude oil and refined fuel. It supplies 14 per cent of Australia’s diesel, 10 per cent of its petrol and 11 per cent of its jet fuel.

Similar to engagements with with other countries in the region over the past week, Mr Albanese sought to leverage Australia’s importance as a trade partner to reach a supply guarantee.

Australia provides almost all of Malaysia’s liquefied natural gas imports and a significant amount of agricultural goods.

“Australian resources help to power our region and our farmers help to feed the region,” Mr Albanese said.

“Nearly 60 per cent of Malaysia’s wheat and 75 per cent of its lamb and beef come from Australia and our neighbours know that providing fuel and fertiliser to Australia helps put food on the table in this region.”

The talks with Malaysia’s prime minister came after Mr Albanese signed similar agreements with Brunei and Singapore.

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