The Australian government is temporarily easing fuel quality standards amid rising prices and concerns about fuel shortages.
“To increase supply and ensure downward pressure on prices, I am temporarily changing Australia’s fuel quality standards to allow higher sulfur levels over the next 60 days,” Climate Change and Energy Minister Chris Bowen said in a press release today.
“This will allow approximately 100 million liters of new petrol per month that would otherwise have been exported to be blended into Australia’s domestic supply instead,” Mr Bowen continued.
“In return, Ampol Australia is committed to ensuring this redirected supply is prioritized for regions experiencing shortages and for the wholesale spot market that supports independent traders and harvesters.
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“Although fuel consumption in Australia has not changed, this will help ease pressure on distribution chains disrupted by increased demand.”
The Government is prioritizing this supply to primary producers such as farmers and fishermen, as well as Australians living in regional areas.
It has not been confirmed how much higher the sulfur content will be in this fuel supply.
From December 15, 2024, all petrol at Australian petrol stations was required to have a maximum sulfur content of no more than 10 parts per million.
While diesel fuel in Australia had already been limited to 10 ppm sulfur since 2009, unleaded premium fuels with 95 RON and 98 RON were allowed to have a maximum sulfur content of 50 ppm since 2008, while regular fuel with 91 RON was limited to 150 ppm sulfur from 2005.
Australia – along with other International Energy Agency member states – has agreed to voluntary joint action to address disruptions in the oil market resulting from the conflict in the Middle East.
“This means member countries will be encouraged to release fuel in a coordinated way – helping to calm the global oil market,” Bowen said.
“Australia is finalizing its contribution, which will then be released directly to the Australian market.
“This is a voluntary action – what Australia contributes will be decided in our national interest.
“We continue to see expected ships arriving at our ports and we will continue to take measures to reduce the distribution pressures we see in our regions.
“It is clear that there will be impacts on supplies if this war continues – it is the world’s job to mitigate those impacts. We will always act in Australia’s best interests.”
IEA members have agreed to release 400 million barrels of oil from their strategic reserves. This is only the sixth clearance from the IEA since its founding in 1974. The last clearances were in 2022.
“The oil market challenges we face are of unprecedented scale, so I am very pleased that IEA member countries have responded with a collective emergency response of unprecedented scale,” IEA Executive Director Fatih Birol said in a statement.
“Oil markets are global, so the response to major disruptions must also be global. Energy security is the IEA’s founding mandate and I am pleased that IEA members are showing strong solidarity and taking decisive action together.”
The IEA members together have an emergency stockpile of over 1.2 billion barrels of oil, with another 600 million barrels of industrial stockpiles subject to government commitment.
The IEA has reported that export volumes of crude and refined oil are less than 10 percent of pre-conflict levels. About 25 percent of the world’s maritime oil trade passes through the Strait of Hormuz, where Iran has threatened to lay mines and where tankers have come under fire.
In a press conference on Tuesday March 10, Mr Bowen and Prime Minister Anthony Albanese sought to update Australians on the state of the country’s fuel supply.
“I can say that our diesel and petrol supplies remain secure at this time. We have as much diesel in Australia today as we had before this crisis began and the storage commitment that companies are legally required to meet remains at 32 days,” Mr Bowen said.
“We are seeing a sharp increase in demand, particularly for diesel, and I understand why Australians are concerned, but my key message is that every single expected arrival of diesel supplies over the last few days and the expected coming days and weeks have arrived as expected, so there is no need for panic buying.”
“Now I have great concern and compassion particularly for those farmers who are struggling to access diesel due to the supply chain situation in regional Australia, but I must emphasize that this is to address a huge surge in demand and not an impact on supply at this time.
“While there are currently challenges and uncertainties across all international supply chains, the preparations the government has made for the minimum stock requirement are working.
“If there is a need to access these minimum supplies, we will do so, but we are not at that point yet.”
