London — Australia will seek to bolster its fuel storage capacity by developing currently limited domestic storage facilities to add to emergency oil stockpiles stored beyond its borders, Energy Minister Angus Taylor said.
“Australia continues to enjoy a reliable supply of fuel, but the COVID-19 pandemic has highlighted the impact that large, unexpected changes in fuel supply and demand can have on the fuel storage and refining sectors,” Taylor said in a statement.
In April, the country said it would spend A$94 million ($64 million) to build an emergency oil stockpile by buying crude to store in the U.S. Strategic Petroleum Reserve to take advantage of a slump in oil prices. Australia and the United States finalised the deal early this month.
Australia has been in talks with the country’s four refiners about storing fuel within its borders, rather than in the United States, to meet the International Energy Agency (IEA) fuel security rules.
Taylor said the federal government will work with local refiners to identify potential domestic storage projects.
The minister said all Australian refineries would be temporarily allowed to produce diesel from the excess jet fuel supplies due to the grounding of the airline industry from the new coronavirus crisis.
“This will ease the storage pressures currently being felt by refineries from the drop in demand for fuel products as a result of COVID-19,” Taylor said.
IEA member countries are required to hold emergency oil stocks equivalent to 90 days of net oil imports. As of March, Australia held 56 days of net imports by the standard definition and 75 days’ worth including oil en-route to Australia, according to government data.
$1 = 1.4620 Australian dollars
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Renju Jose; Editing: Kenneth Maxwell – HP