At a time of rising global instability, Australians are paying higher prices while our national fuel resilience weakens.
This is not sustainable.
What’s happening and why it matters
Australia’s fuel system is already under pressure and Australians are paying for it.
In recent weeks, fuel prices have surged, exposing how reliant Australia has become on overseas supply. We import most of the fuel we use, hold far less in reserve than comparable countries, and have reduced our ability to produce it domestically.
When fuel costs rise, it doesn’t stay at the pump. It flows through food, freight, and everyday living costs — driving up prices across the entire economy.
This vulnerability has been building for years.
But under the Albanese Government, there has been no meaningful action to strengthen Australia’s fuel security or reduce exposure to global shocks.
Australians are now feeling the consequences of a system left exposed.
The issue explained
-
Australia cannot function without fuel.
It powers agriculture during critical planting and harvest periods, keeps freight moving across vast distances, supports aviation and tourism, and underpins everyday life for households and businesses.
Because Australia is geographically large and highly dependent on transport, fuel sits at the centre of economic activity.
When fuel costs rise, the impact spreads quickly — through freight, food, construction, and essential services.
There is no part of the economy that isn’t affected.
-
Australia imports the vast majority of its refined fuel.
Around 80–90% of petrol, diesel and aviation fuel is produced overseas, primarily in large refining hubs such as Singapore, South Korea and Japan.
That means Australia depends on:
international refining capacity
global shipping routes
stable geopolitical conditions
These systems work — until they don’t.
Disruptions to shipping, geopolitical instability, or supply constraints can quickly affect both availability and price.
The more Australia relies on external supply, the less control it has when conditions change.
-
Australia once had a much stronger domestic refining industry.
In the late twentieth century, eight refineries operated across the country. Over time, closures reduced that number to just two.
This was not a sudden shift — it happened gradually, over decades.
Each closure reduced Australia’s ability to produce its own fuel and increased reliance on imports.
Today, only Geelong and Lytton remain operational.
What was once domestic capacity has been replaced by dependence.
-
Fuel reserves exist to provide a buffer during supply disruptions.
Australia currently holds approximately 30–36 days of fuel reserves.
International benchmarks commonly referenced by advanced economies are closer to 90 days of reserves.
The difference between these levels reflects a lower margin of supply protection if international shipments are delayed or disrupted.
If global supply is disrupted, reserves determine how long a country can maintain stability.
Australia has less margin for error than many of its peers.
-
Fuel costs affect far more than what Australians pay to fill up.
They influence:
freight and logistics
agricultural production and food distribution
construction and industrial activity
aviation and tourism
operating costs across businesses
Because fuel is embedded across supply chains, price increases flow through the entire economy.
When fuel costs rise, the impact is widespread — and difficult to avoid.
What we are asking for
We call on the Australian Government to act immediately:
Temporarily suspend fuel excise during the current supply crisis: Australians currently pay 52.6 cents per litre in fuel excise. Temporary relief would immediately reduce cost pressures across the economy.
Suspend GST on fuel during the crisis: GST is applied after excise, meaning Australians pay tax on tax, during periods of supply shock, this additional burden should be removed.
Prioritise domestic fuel supply: Australia must ensure locally refined fuel serves domestic demand before export during supply instability.
Rebuild sovereign refining capacity: Australia once operated eight refineries. Today only two remain. A clear long-term plan is needed to restore and modernise domestic refining capability.
Establish domestic contingency fuel capability: Australia should rapidly develop locally derived fuel options to ensure supply resilience during global disruptions.
We are urging The Albanese Government to exercise fiscal responsibility.
Tax relief now cannot become tax burden later. If government revenue is reduced, government spending must be reduced accordingly. Anything less simply shifts the cost onto future Australians through debt or higher taxation.
Stories that cut through
FAQs
Why is fuel security an issue in Australia?
Australia imports the majority of its refined fuel. Over the past two decades, most of the country’s oil refineries have closed, leaving only two operating facilities. This means much of the petrol, diesel, and jet fuel Australians rely on every day is refined overseas and shipped to us.
If global supply chains are disrupted, Australia could face serious fuel shortages.
How many refineries does Australia have today?
Australia once had eight oil refineries. Today, only two remain in operation.
The rest have closed due to global competition from larger refineries in Asia and changing economics in the oil industry.
Where does Australia’s fuel come from now?
Most of Australia’s fuel is refined in Singapore, South Korea, and other Asian refining hubs, then shipped to Australian ports.
While this system works during normal times, it makes Australia heavily dependent on international supply chains.
What could disrupt Australia’s fuel supply?
Several things could interrupt fuel imports, including:
• geopolitical conflict
• shipping disruptions
• cyber attacks on ports or logistics networks
• natural disasters affecting major shipping routes
• global fuel shortages
Even short disruptions could affect transport, food supply, emergency services, and the economy.
How much fuel does Australia store?
Australia’s fuel reserves are relatively small compared with many other developed countries.
For years, Australia did not meet the International Energy Agency (IEA) 90-day fuel reserve obligation, though some improvements have been made through overseas stockholding agreements.
Many experts argue Australia still needs stronger domestic fuel resilience.
Why did Australia’s refineries close?
Several factors contributed:
• higher operating costs in Australia
• ageing refinery infrastructure
• strong competition from large, modern Asian refineries
• global consolidation of the refining industry
Over time, importing refined fuel became cheaper than producing it locally.
Why does fuel security matter?
Fuel powers nearly every part of the Australian economy.
It keeps trucks moving, planes flying, farms operating, and emergency services running. If fuel supplies were disrupted, the effects could ripple through food distribution, healthcare, national defence, and daily life.
Is this about stopping fuel imports?
No.
Australia will likely continue importing refined fuel. The goal is not to eliminate imports, but to ensure the country is not dangerously dependent on them without sufficient reserves or contingency plans.