(Australian Associated Press)
Australia will establish a strategic fuel reserve to safeguard supplies in times of crisis as the federal government seizes on record low oil prices.
Energy Minister Angus Taylor said the reserve would initially be in the United States because Australia’s storage facilities were full.
“In the event there is a global disruption that slows fuel supplies moving around the world, we will get access to the fuel we need to keep our country going,” he told reporters in Canberra on Wednesday.
The government will spend $94 million on kickstarting the strategic reserve designed to lower Australia’s exposure major supply chain disruptions.
“Now is the time to get in and start building the strategic fuel reserve,” Mr Taylor said.
“We now have the historically low prices that allows us to do this and to do it in a way which is attractive for the taxpayer.”
Discussions between the government and private sector are ongoing about building more storage capacity to house the fuel reserve in Australia.
Mr Taylor said more onshore storage was a long-term goal.
“I signed an agreement with the United States to access their reserves, simply because we don’t have the storage space here in Australia right now,” he said.
It is estimated the cost of building more storage in Australia could be in the billions.
Mr Taylor said Australia had between 20 and 30 days worth of fuel on home soil but the figure was 50 to 80 days across the whole supply chain.