Australia’s diesel standards have been temporarily lowered as the federal government rushes to shore up fuel supply, with hundreds of service stations running empty and warnings deliveries from key Asian suppliers could slow as soon as early April.
The energy minister, Chris Bowen, said on Tuesday the government had lowered the technical threshold for diesel, known as the flashpoint, in order to access supply from imports from markets with marginally lower burning temperatures, including the US, Canada and Europe.
This six-month adjustment will reduce the flashpoint from 61.5 degrees Celsius to 60.5 degrees Celsius.
The change comes after the government lowered petrol standards for 60 days, a move expected to add an extra 100m additional litres to the local market.
But Bowen told question time on Tuesday at least 164 service stations in New South Wales were already out of diesel, as well as 289 that were missing at least one type of fuel. There are 2,417 service stations in the state.
In Queensland, 55 have no diesel and 35 have no regular unleaded. In Victoria, 162 were missing some fuel, as well as 46 in South Australia, and six in Western Australia. In Tasmania, one station is without diesel and six have no unleaded.
Sign up for the Breaking News Australia emailAnalysts warned Australia has just three weeks of certain fuel imports left as Asian suppliers begin cutting petrol production, predicting more shipments are likely to be delayed or cancelled.
At least two major refineries in Singapore and Taiwan that supply Australia have dropped production by more than a tenth since war broke out, said Tom Woodlock, a senior analyst at Argus Media. So far, six shipments have been cancelled.
“There is a high chance more [shipments] will be cancelled in the coming weeks or months,” Woodlock said.
Sushant Gupta, research director with Wood Mackenzie, said Asian production of fuel could fall by a fifth or more in coming weeks if refiners did not get access to oil from the Middle East.
“Loss of supply is already happening now,” Gupta said.
“Many of the refiners will have to cut their runs by more than 20% or some may have to shut down … in the next few weeks. Their refinery stocks will only last them for, say, 10 to 15 days.”
“Australia will have to find alternative sources and they will probably be longer-haul, so that planning has to start now,” Gupta said, pointing to the US and Europe as options.
Woodlock said Australian importers had also ordered more expensive fuel from the US.
“Australia is in a stronger position to ‘out-bid’ other countries for these cargoes because the country can afford to pay the premiums required to replace the cancelled cargoes,” he said.
Some state premiers on Tuesday called on the federal government to take a stronger role coordinating supply.
“If demand management procedures are required – that might be rationing, that might be working from home, it might be other programs or remedies that we can introduce into the marketplace – we’re firmly of the belief that it should be a nationally consistent approach,” the NSW premier, Chris Minns, said.
Queensland’s deputy premier, Jarrod Bleijie, said managing the crisis was “a Labor issue, federally. They should have dealt with it”.
The Victorian opposition leader, Jess Wilson, suggested a cut to the federal fuel excise, a proposal backed by federal crossbench MP Rebekha Sharkie. Treasurer Jim Chalmers ruled out such a move.
The shadow energy minister, Dan Tehan, accused Bowen and the government of sowing “confusion” about petrol supplies, and demanded Labor do more to coordinate fuel distribution.
The NRMA said it had experienced a 15% increase in callouts for motorists running out of fuel this month, to about 306 so far in March in New South Wales alone.
