Report: Australia relies on imports for over 90 per cent of fuel consumption

A newly released research report paints a picture of the issues with Australia’s heavy reliance on imports for its fuel, labelling the situation a “national security problem”.

The report by The Australia Institute says Australia has only increased its reliance on imported transport fuels since the federal government released its interim Liquid Fuel Security Report in early 2019.

The research highlights that Australia’s transport fuels are highly vulnerable to international prices and supply chains; while adding that not enough is being done to reduce fuel demand, such as encouraging the uptake of electric vehicles.

Australia only has 68 days of liquid fuel (January 2022) under the IEA’s 90 day minimum stock requirement.

The report adds that the Australian government has budgeted over $2 billion in support payments for Australia’s two remaining oil refineries but nothing for electric vehicles.

Transport consumes 73 per cent of liquid fuel, with 54 per cent of Australia’s liquid fuel consumed by road transport.

The report suggests that if all passenger vehicles in Australia were pure electric vehicles, 33 per cent of imported oil could be replaced with domestic electricity.

Richie Merzian, Climate & Energy director at The Australia Institute said, “Australia has a national security problem when it comes to transport fuels. It’s worrying that Australia is almost entirely reliant on foreign oil for fuel consumption leaving it ill-prepared to deal with international disruptions.”

According to the report, the Ukrainian War and Western Europe’s (particularly Germany’s) reliance on Russian oil, gas and coal have dramatically highlighted the linking of economic security and international security.

“It should concern every Australian that 91 per cent of Australia’s fuel – like petrol and diesel – is linked to imports and most of that is used for transportation,” Merzian added.

“The federal government failed to deliver its final Liquid Fuel Security Review in 2019 and since then Australia has become more, not less fuel insecure.

“High petrol prices are already hurting Australians. The only long-term solution is getting off oil. This involves increasing fuel efficiency and transitioning to electric vehicles.

“Australia is an international laggard when it comes to fuel efficiency. Weak fuel standards and an absence of a national electric vehicle policy leave Australia among the least fuel-efficient fleets in the OECD, and far behind the rest of the world in electric vehicle uptake.”

Among the report’s recommendations is to create a national energy security strategy that specifically considers demand-side solutions to oil dependency. This would include a set target for the reduction of oil imports and separate targets for petrol, diesel and aviation fuel.

It adds that the best way to improve Australia’s liquid fuel security in the medium term would be to reduce petrol consumption by switching to electric passenger vehicles, which would provide more capacity to address diesel and aviation fuel insecurity.

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