Where does Australia’s diesel fuel come from?

https://www.youtube.com/watch?v=poiiDwegTYc&feature=youtu.be

Several news stories came out in May 2018 across popular outlets, such as ABC, The Conversation and the Sydney Morning Herald, about the status of Australia’s fuel supply. “Are we running out of fuel?”, “Are we vulnerable to global disruption?” and “where does Australia’s diesel fuel come from?” were the top headlines.

As one of Australia’s leading bulk diesel suppliers, we thought we’d address these questions head-on.

So where does our diesel fuel and oil come from?

To put it bluntly, Australia is nearly dependent on imported fuel. We rely on other countries for roughly 83%, up from 60% in 2000, of our fuel. But that’s not where this story ends.

While Australia is dependent on fuel imports to meet the demand for transport fuels, it is sourced from a diverse global supply. There are 17 countries in total, mainly in Asia (40%), but also in Africa (18%) and the Middle East (17%). Much of the oil is processed in South Korea, China and Singapore and is then shipped to Australia as diesel, aviation fuel and petrol.

Australia’s Energy Minister, Josh Frydenberg, says Australia’s reliance on imported fuel has increased in recent years 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".

But BFA, aren’t we a significant oil producer? We sure are. In fact, 70% of crude and condensate production comes from the Carnarvon basin in Western Australia. But we choose to export 75% of our crude production, with the largest recipients being Indonesia, Singapore, China, Thailand and Malaysia. At the same time, our local production is declining while the importing of refined petroleum is only increasing.

Does Australia only have three weeks of fuel in reserve?

In January 2018, it was revealed that Australia has under 50 days’ worth of fuel stocks. Just five years ago, it had double that amount. The current standard is three months for fuel reserves, but Australia has continually failed to meet those requirements.

Further to this, the Australian Petrol Statistics cites Australia as having only 17 days’ worth of diesel fuel, 20 days of aviation fuel and 23 days of unleaded petrol in reserve in case of emergency.

Are there risks to importing fuel?

Of course, there are, yet every country in the world who imports fuels faces those same risks, especially “in case of international disruption”.

Political instability and economic sanctions on oil-producing countries, such as Iran, coupled with our geographically dispersed oil supply chains makes for potential future challenges. So far, it has had little impact on global oil flows and trade. Even during previous conflicts and wars in the Middle East, Australia has had no issues sourcing crude oil, with trade continuing in the region.

Our major issues as it stands is to secure our national fuel supplies and top up the reserve. Hopefully, the proposed Fuel Security review brought forward by the Australian Government in May 2018 will address those challenges.

About Bulk Fuel Australia

Bulk Fuel Australia is an independent bulk fuel company, specialising in the supply and delivery of bulk diesel fuel, petrol, heating oil and Final Filtered Diesel® to a variety of industries including building and construction, marine, agriculture and power generation.  For a competitive on-site fuel delivery quote, contact us today.