Australia To Spend US$7.7 Billion on Fuel Security Plan

Written by Martin Lynch, European News Editor for IIR News Intelligence (Sugar Land, Texas)

Summary

Australia's Federal government has allocated AUD$10.7 billion (US$7.7 billion) in its upcoming budget to deal with the ongoing fuel and fertilizer shortages caused by the Iran war.

Improve Fuel Security 

Australia's federal government has approved a AUD$10.7 billion (US$7.7 billion) fuel and fertilizer security plan that will include the creation of a permanent government-owned fuel reserve. 

The package will see AUD$7.5 billion (US$5.4 billion) for the establishment of a Fuel and Fertiliser Security Facility to increase supply and storage of fuel and fertiliser by providing financial support including loans, equity, guarantees, insurance and price support. A further AUD$3.2 billion (US$2.3 billion) will be spent to build a government-owned Australian Fuel Security Reserve of around 1 billion litres to increase long-term diesel and aviation fuel supply and storage. The country will also increase the minimum stockholding obligation (MSO), boosting Australia's critical fuel reserves to 50 days. A feasibility fund of AUD$10 (US$7.3 million) will be put in place to assess ways to add new, or expand existing, fuel refining capabilities. According to Industrial Info Resources data, the country has only two refineries:Viva Energy's 120,000 barrel-per-day (bpd) Geelong refinery in Victoria and Ampol's 109,000-bpd Lytton refinery in Brisbane, Queensland.

"This is an important update on our preparedness for the National Fuel Security Plan," said Prime Minister Anthony Albanese. "It is important to recognise the fact that the longer that the Strait of Hormuz is essentially shut, even in spite of the ceasefire being in place for four weeks now, the longer this conflict goes, the greater the impact will be. It's as simple as that. Our number one priority remains shielding Australians from the worst effects of this crisis.That is why as well, my Government has cut the tax on fuel in half and we've worked relentlessly to secure our fuel supply lines. So far, we are faring well, and Australia remains at level two of the plan, and we want to stay at level two for as long as possible."

Australia Exposed

Australia is exposed more than some other nations to the global fuel crisis as it exports most of its crude oil and relies heavily on imports of refined fuels for more than 80% of its needs. In fuel terms, that's roughly 850,000 bpd in 2025, mainly from Asia. The country has only two operational refineries, which in 2025 produced a combined 12 billion liters of petrol, diesel and jet fuel - about 20% of Australia's annual demand. That limited refining capacity was brought into sharp focus recently when a major fire broke out at the Geelong refinery, interrupting supplies of petrol and diesel. For additional information, see April, 2026, article - Australia's PM: Major Refinery Fire Won't Hurt Fuel Supplies. Industrial Info Resources is tracking 23 refining projects in Australia worth US$963 million in investment. Subscribers to Industrial Info Resources' Global Market Intelligence (GMI) Project Database can click here for the reports.

Extra Refining Support

Australia recognizes how vital its limited refining facilities are and recently announced that it was extending its subsidies for the country's two refineries until 2030. The Fuel Security Services Payment (FSSP) programme was introduced in 2021 to provide payments to refiners when prices don't cover the costs of production. For additional information, see April 02, 2026, article - Australia Extends Support for Refineries to 2030. 

Key Takeaways

• Australia's government approves AUD$10.7 billion (US$7.7 billion) fuel and fertilizer security plan. 
• Australia is reliant on imports of refined fuels for more than 80% of its needs.
• The plan calls for the creation of a permanent government-owned fuel reserve that will add 1 billion litres to stockpiles.

About Industrial Info Resources
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