THE Victorian Farmers Federation is calling for urgent action from the Federal Government to strengthen Australia’s fuel security in response to global volatility and uncertainty.
Fuel prices across regional Victoria have smashed straight through the $2 ceiling, with diesel costing up to $2.30 per litre at outlets across the north west on Thursday.
VFF president Emma Germano said the reduced global supply of fuel could have dire consequences for global food security and called on decision makers to strengthen Australia’s resiliency to fuel shortages.
“From sowing crops to transporting it to market, our entire supply chain is reliant on a secure, affordable and disruption-free fuel supply,” she said.
“Members of the International Energy Association are obliged to hold 90 days of net fuel import and Australia has been non-compliant since 2012. While Australia does have strategic national reserves, they are stored in the United States and would take over three weeks to reach Australia in the event of a crisis.
“Given the global uncertainty in the market, we’re calling for adequate resources to be allocated to the entire supply chain and our strategic fuel reserves to be brought onshore.
“We don’t know what lies ahead, but now is the time to safeguard our industry.
“As producers of perishable essential goods, the security and timeliness of supply are critical. We can’t afford to leave this to chance.”
After Russia invaded Ukraine, global oil prices soared. Last week Brent crude, the global benchmark, hit $139 per barrel – and kept climbing. Analysts warned prices could touch $185, then $200; as traders shunned Russian oil, pushing inflation even higher and adding huge strain to the global economy.
But just as quickly, it has all turned around again, Brent futures have dropped like a stone – down almost 30 per cent and possibly still falling.
Whether that reversal has the same impact at Victorian bowsers in time for farmers gearing up across the region for sowing remains unknown.
Driving the market down are hopes Saudi Arabia and the United Arab Emirates will boost oil production.
However analysts are warning the worst may not be over and that, at best, we may be entering a period of extreme volatility – and that’s still not good news for farmers.
At the same time, Federal Energy Minister Angus Taylor has denied new laws forcing fuel importers and refineries to hold enough stock onshore for a minimum of 24 days.
In its latest petrol price report, the Australian Competition and Consumer Commission said the new Minimum Stockholding Obligations (MSO) would increase costs for fuel importers that would likely be passed on at the pump.
“The MSO will impose more costs on refiners and importers, which may include building more storage capacity and importing fuel more frequently, and industry participants faced with additional costs are likely to pass them on in the form of higher wholesale and retail fuel prices,” the ACCC said.
The Federal Government is under pressure to reduce its fuel excise of 44.2 cents per litre as countries drop their Russian oil imports and the world rebounds from COVID-19 restrictions.
