Anthony Albanese's fuel diplomacy in Asia is yielding early benefits, but challenges remain due to ongoing global supply issues. The recent fire at Geelong's Viva refinery adds to concerns about Australia's fuel crisis.
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Anthony Albanese’s fuel diplomacy tour of Asia has already started paying dividends, but the real test could still be to come.
After last week’s rush to Singapore and pulling forward a planned visit, the prime minister dashed back to Australia from Malaysia on Thursday, to survey the damage at one of the nation’s only remaining fuel refineries. The hastily arranged trips, were to show a leader on the job; to demonstrate Albanese’s attention to the fuel crisis.
While the number of petrol stations without petrol and diesel has been steadily declining each day, and the government is confident that further fuel imports are now assured into at least June, there are no illusions that Australia is out of the woods yet. The fragile ceasefires in the Middle East, and Trump’s blockade-of-a-blockade entirely plugging up the strait of Hormuz, have done little to assuage fears about ongoing supplies of oil, fuel and fertiliser.
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It’s why the fire at Geelong’s Viva refinery couldn’t have come at a worse time, even if damage was not as great as first feared. The energy minister, Chris Bowen conceded it was “really bad timing”, as Albanese forecast Viva’s output would see a “slight slowdown”.
With little on-shore refining capacity of our own, even a small interruption to one of Australia’s two facilities is not ideal.
All this means a couple of small shipments of extra fuel would come in pretty handy.
Like the 100m litres from South Korea and Brunei, announced just a day after Albanese’s visit to the latter country.
Albanese and Bowen were accused by critics of being found flat-footed in the early days of the crisis, initially writing off concerns then downplaying impacts on the nation’s fuel supplies. Some of the same critics ridiculed Albanese as having overcorrected with his televised address to the nation. But weeks of diplomatic engagements with partners worldwide, and more recent in-person visits to key allies in our region, have borne early fruits of fuel and fertiliser – with more to come, Albanese foreshadowed.
The fact the PM didn’t come back with a shipload of diesel in his checked baggage didn’t mean the trip wouldn’t be seen in future as a pivotal moment.
“This is the first of many expected shipments secured under the government’s new strategic reserve powers with the support of Export Finance Australia,” the prime minister said of the 570,000 barrels of diesel bought by Viva .
Albanese's tour has led to increased confidence in securing fuel imports into Australia, alleviating some immediate supply concerns.
The fire has raised concerns about a slowdown in output from the refinery, which is critical during the ongoing fuel crisis.
Australia is still grappling with fragile global supply chains, particularly due to geopolitical tensions affecting oil and fuel availability.
The government is actively working to secure additional fuel imports and is monitoring the situation closely to ensure supply stability.
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Stirring media pictures of Albanese in protective work gear, inspecting refineries in Singapore and fertiliser plants in Brunei, didn’t hurt either, nor did headlines about the nation’s leader rushing back from overseas engagements to tend to emergencies at home.
Of course, 100m litres of diesel is little more than a day’s worth of normal Australian consumption. And the capacity of Viva to use and process that fuel could be constrained by the fire at their Geelong plant. So while every little bit helps, and the government will be happy to have an extra day of fuel in the tanks, Albanese will be hoping extra shipments keep getting won by Australian bidders.
The extent of Viva’s slowdown is still to be confirmed, but Albanese said the plant’s owners had said 80% of diesel, 80% of aviation fuel and 60% of petrol production would continue. The plant contributes only 10% of Australia’s total fuel needs, but half of Victoria’s, so the effects in totality may be relatively small. Viva CEO, Scott Wyatt, said the incident wouldn’t have any effect on Victorian supply, that the plant may be able to boost its output to make up any shortfalls, and that the company wouldn’t pass on any extra costs to consumers. That’s a relief.
The government might be able to nickel-and-dime its way through the fuel crisis, extracting agreements from key partners that petrol products will keep coming on ships, and snapping up extra supplies where they can. While prices at the pump remain high, fuel reserves are not plummeting, and fewer petrol stations are without petrol. Albanese is still working overtime to project calm, downplaying the prospect of going to higher stages of the emergency fuel plan, and even the Coalition opposition is struggling to articulate a coherent point of criticism.
The best Angus Taylor has been able to manage, is vague concerns about a lack of transparency. Bowen, meanwhile, is holding press conferences virtually every day where he gives updates on petrol station outages, as well as a weekly weekend update on fuel reserves, and regular updates on contracted fuel orders (for those keeping track, he told the Nine newspapers “all of May” is covered, and “there have been orders made for June”).
But back-to-back overseas trips, when most leaders would be loathe to head out of the country during a crisis, and trumpeting relatively minor new fuel arrangements show there is some level of concern in the government that things could deteriorate. Adding BP to the list of companies that can draw down on the Export Finance arrangements to underwrite fuel purchases, shows the government wants to keep all its bases covered.
Next month’s budget is likely to include new arrangements on fuel security. While boosting our 30-day fuel reserves up to 90 days isn’t expected, Albanese said on Friday that one of the budget’s main themes would be “resilience”, in terms of “leaving us less vulnerable to international events”.
As the fire at Viva’s refinery shows, resilience in our key systems isn’t a given.