Representing Australia's Downstream Petroleum Industry

FACTS ABOUT THE AUSTRALIAN TRANSPORT FUELS MARKET

  • represent around 90% of primary fuel supply to the Australian market
  • have decades of operational experience in Australia and Asia delivering high quality fuel to customers
  • have major investment in infrastructure/storage around Australia and throughout the supply chain
  • have invested over $10 billion in the last decade in their refineries and supply chain infrastructure.

KEY FACTS

Australia does not have a transport fuel reliability or security problem.

  • Australia’s transport fuels and crude oil are sourced from a wide diversity of sources.
  • There are highly flexible supply chains into/within Australia and varied/flexible shipping routes.
  • The industry has robust commercial stockholdings at least cost to motorists and major users while maintaining high supply reliability.
  • Commercial storage capacity in the Australian supply chain has increased in recent years and no long-term/widespread shortage of transport fuel supplies has occurred.
  • Australia’s compliance position with the IEA stock obligation largely

Australian refinery closures have not affected supply reliability and security for transport fuels.

  • Refineries mainly use imported oil so “products on water have replaced crude on water”.
  • All AIP member companies continue to invest in supply infrastructure to support current and future demand for transport fuels.

Integration into the Asian market is the key to Australia’s supply security, not mandatory oil stocks.

  • According to the IEA, “Asia has become the unrivalled centre of the global oil trade” as the region draws in a rising share of the available crude from around the world.
  • Asia is the lowest cost source of alternative supply and has excess supply capacity.
  • Integration into this key market is in national/consumer interests, fuels self-sufficiency is not.
  • Large fuel volumes available in ships each month (including for diversion to where needed most around Australia) is more fundamental to our supply chain operation than mandatory stocks.
  • Mandatory oil stockholding would impose a very significant cost on Australians - regardless of whether the $6.8 billion price tag published by the Government is paid for by them or consumers.

Australia’s emergency response arrangements for transport fuel supply are robust.

  • The Government has flexible powers to respond to a major national or global emergency.

Alternative fuels can play a role in a diversified transport fuels mix, but the competitive market should determine that role. The market will transition to other fuel types when they are economic.

Energy and economic security issues are distinct from national security issues.

  • National security issues and scenarios should be considered as part of Defence planning and reviews and energy security assessed through the Energy White Paper process.

The Commonwealth Fuel Quality Standards Act 2000 provides a legislative framework for setting national fuel quality and fuel quality information standards for Australia.

Fuel quality standards have been made for Petrol, Diesel, Biodiesel and Autogas.

For more details on the regulated specifications that apply to fuels, see: www.environment.gov.au/atmosphere/fuelquality/standards/index.html

The Fuel Standards Consultative Committee

The Fuel Standards Consultative Committee is established under the Fuel Quality Standards Act 2000 (the Act) as a formal consultation mechanism.

The Act requires that the Committee include one representative of each State and Territory Government, and the Australian Government. It must also include at least one person representing fuel producers, a non-government body with an interest in the protection of the environment, and a person representing the interests of consumers. The Committee held its first meeting in July 2001. The Committee usually meets twice a year and works in between these meetings.

Under the Act, the Minister must have regard to the Committee's recommendations about a range of matters. The Minister must consult the Committee before:

  • determining a fuel standard or fuel quality information standard;
  • granting an approval to vary a fuel standard for a specified period;
  • changing the contents of the Register of Prohibited Fuel Additives; and
  • preparing guidelines for more stringent fuel standards which may apply in specified areas in Australia. None have yet been made.

AIP is the representative for fuel producers on FSCC.