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ATA labels $2 billion fuel security package a big win for trucking

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The Australian Government’s fuel security announcement today is a win for the trucking industry, CEO of the ATA, Andrew McKellar said.

McKellar said the package, which guarantees that Australia’s two remaining refineries will be offered up to 1.8 cents per litre of fuel they produce until 2030, was the result of a long term, strategic advocacy campaign by the ATA.

“Diesel and liquid fuel security are critical to Australia’s economy – 98 per cent of the energy for the transport sector is sourced from liquid fuel,” McKellar said.

“But Australia has dangerously low fuel stocks. In March 2021, Australia only had 21 days of diesel in the entire country.”

The government’s overall fuel security package includes support for domestic refineries (with the details announced today), onshore fuel storage and modernising the liquid fuel emergency legislation.

“The ATA and its members have been campaigning on fuel security since 2014. We ran a fuel security exercise in 2015 and have engaged extensively with government since then,” McKellar said.

McKellar added that the package would be funded by the government, not by a fuel security levy on road users.

“This is a big win for every road user. With the strong support of our members, we argued that there shouldn’t be a fuel levy to fund the package, because we all depend on the secure availability of fuel,” he said.

McKellar said in the long term, Australia’s fuel security would be secured by the introduction of electric and hydrogen vehicles.

“This will be a long process, so the Government should take stronger action now to encourage the introduction of zero and low emission vehicles into the fleet,” he said.

“This should include a temporary purchase incentive, support for recharging and refuelling infrastructure and amending the vehicle design rules.”

Prime Minister Scott Morrison said the package would protect hundreds of jobs at the Viva refinery in Geelong and the Ampol refinery at Lytton.

“This is a key plank of our plan to secure Australia’s recovery from the pandemic and to prepare against any future crises,” he said.

“Shoring up our fuel security means protecting 1250 jobs, giving certainty to key industries, and bolstering our national security.”

The government said the Fuel Security Service Payment would be linked to refining margins, meaning refineries would only be supported in “down times”.

Under the scheme, the refineries receive a maximum payment of 1.8 cents per litre when the margin they make per barrel of oil falls to $7.30.

The payment will decline to zero if margins increase to $10.20 per barrel.

The government aims to have the payment in place by the beginning of July, with the associated legislation to be introduced to Parliament in the coming weeks.

The measure has been costed at up to $2 billion to 2030 “in a worst-case scenario” assuming both refineries are paid at the highest rate for the entire nine years.

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