Minister For Climate Change And Energy’s Final Versions Of Question Time Brief’s Regarding Fuel Issues.

DCCEEW

82785 11/05/26 New

FOI reference: 82785
Date released: 11/05/26
Pages: 34

AI summary

This document is a Question Time Brief prepared for the Minister for Climate Change and Energy regarding Australia's liquid fuel security policy, not an environmental assessment or regulatory decision document. It outlines the Government's fuel security framework including the Minimum Stockholding Obligation (commenced July 2023), domestic refining support through the Fuel Security Services Payment, and a $1.1 billion Cleaner Fuels Program announced September 2025 to develop low-carbon liquid fuel production. The brief notes liquid fuels represent over half of Australia's energy consumption with over 90% imported, and includes talking points emphasizing the role of traditional fuels alongside electrification and alternative fuel uptake. The document contains no specific environmental sites, species assessments, EPBC Act decisions, quantified emissions data, or disclosed disagreements between scientific advice and ministerial decisions.

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# LIQUID FUELS

## ISSUE/QUESTION

The Australian Government is committed to safeguarding Australia’s liquid fuel security.

## POLITICAL TALKING POINTS:

Office Use Only

![img-0.jpeg](img-0.jpeg)

Contact Officer: Cris Cano
Office: www.insano.ca
Phone: 9-412-516-01-0
Responsible Division: Gas and Liquid Fuels Division (GLFD) G2
QB26-000047

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Date updated:
23 February 2026

Date reviewed:
24 February 2026

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# KEY POINTS:

- The Australian Government is committed to ensuring we have access to the fuel we need to keep Australia moving.
- Australia relies on liquid fuels for over half of our energy demand. While the use of alternative fuels and new vehicle technology is increasing, traditional liquid fuels will continue to play an important role in Australia's energy mix and in supporting our critical services over the coming years.
- The Government has taken steps to support efficiency, increase uptake of low carbon liquid fuels and electrify vehicles, which will reduce our dependence on foreign oil and cut emissions.
- The Government's fuel security initiatives include:
- maintaining domestic reserves through the Minimum Stockholding Obligation (MSO) that commenced on 1 July 2023;
- maintaining domestic refining capability through the Fuel Security Services Payment; and
- reviewing our liquid fuel emergency legislation to ensure Australia's response capabilities to severe supply disruption events are appropriate.
- The Government has implemented measures to strengthen security of diesel exhaust fluid (DEF).
- Low carbon liquid fuels will deliver decarbonisation options for fuel reliant sectors that cannot electrify or switch to hydrogen in the medium-term. We are supporting the development of a local industry, which will drive new jobs in the net zero economy and bolster our sovereign fuel capability and resilience.
- On 17 September 2025 we announced investment in the $1.1 billion Cleaner Fuels Program to kick-start low carbon liquid fuel production in Australia. We are working to finalise the program's design ahead of opening for applications.
- This builds on the $250 million we have allocated under the Future Made in Australia Innovation Fund to support pre-commercial innovation, demonstration and deployment of low carbon liquid fuels.

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# BACKGROUND:

## Managing Australia's fuel security

- Liquid fuels account for over half of Australia's final energy consumption and over 90% of the fuel used is imported directly as refined product and indirectly as crude to refineries.
- While Australia's liquid fuel market has been resilient in coping with limited magnitude events, it could be vulnerable to prolonged, high impact events.
- That's why the Government has taken steps to enhance Australia's fuel security, is monitoring the fuel market, and will continue to work with the industry and energy users to ensure fuel security is effectively managed.

## A national fuel reserve through a stockholding obligation

## Current liquid fuel stocks

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- Australia's stocks of fuel are currently well above the required level. On average in September quarter 2025, total industry stocks held under the MSO were equivalent to 39 days for petrol, 29 days for jet fuel, and 33 days for diesel (at normal rates of consumption).

- Stocks held under the MSO include finished product stocks on land in Australia and in domestic/coastal waters, as well as finished product stocks on water in Australia's exclusive economic zone and some crude/unfinished product stocks at refineries converted to their finished product equivalent.

- These additional categories of stock means the MSO measure is more comprehensive for fuel security purposes than other measures.

- As well as boosting total stocks, the MSO has significantly raised the floor – even our lowest reported diesel stocks in 2024 were 20% higher than the lowest point in 2022 before the MSO.

# Australia's non-compliance with International Energy Agency (IEA) 90 day rule

- Even though Australia isn't in full compliance with the IEA's 90 day obligation, we are fuel secure.

- We are now holding more stocks of aviation fuel, petrol and diesel than any time in the last 15 years.

- We have strengthened Australia's fuel security with practical and cost-conscious measures, like the Minimum Stockholding Obligation, which have been praised by the IEA.

- These domestic fuel reserves guarantee a minimum buffer of around 4 to 5 weeks from a complete disruption of fuel supply – for example, total isolation of Australia from global oil trade.

- Our stocks will provide much longer resilience for less extreme scenarios.

- We are ready to consider contributions to IEA collective actions, as Australia has in the past.

# International Energy Agency days of net import cover

- Australia had 50 International Energy Agency (IEA) days of net imports cover at the end of December 2025. IEA days averaged 50 days in 2024-25, 53 days in 2023-24, 58 days in 2022-23, 70 days in 2021-22, 67 days in 2020-21 and 57 days in 2019-20.

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- IEA days of net import cover measure Australia's end of month total oil stocks in days based on how much oil we import minus how much we export, known as our daily net oil imports.

- Net imports are different to consumption, which along with the different types of stocks included, means that days of stocks held under the MSO are not comparable to IEA days.

- The fall in Australia's IEA days does not mean our fuel stocks have reduced. Australia held more stocks of diesel on average in 2025 than ever before.

# US Strategic Petroleum Reserve and International Energy Agency collective actions

- Australia held around 1.7 million barrels of oil in the Strategic Petroleum Reserve that was released to the market in response to the International Energy Agency's March 2022 collective action.

- In response to the impact of the war in Ukraine on global fuel markets, there were two International Energy Agency's collective actions in 2022. The first collective action was in March 2022 and the second was in April 2022. Australia contributed to both collective actions.

- Australia met its contribution to the International Energy Agency's April 2022 (second) collective action by deferring the introduction of its Minimum Stockholding Obligation.

# Boosting Australia's Diesel Storage Program

- The Boosting Australia's Diesel Storage Program provided support to industry to construct additional diesel storage capacity in Australia and create jobs.

- The Program, along with other industry investment, has delivered an increase in national diesel storage to support our fuel reserves required by the Minimum Stockholding Obligation.

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# Fuel Security Services Payment

- The Fuel Security Services Payment provides eligible refiners with a payment of up to 1.8 cents per litre under the Fuel Security Act 2021. It helps refiners manage their downside risks in exchange for them continuing to produce critical fuels: diesel, petrol and jet fuel.
- Up to $2.047 billion in funding to 2030 is available to refiners in the worst-case scenario.
- Payments are carefully calibrated to external market conditions, switching on and off to provide Government support only when refinery margins are poor.
- There have been two payments since the scheme began on 1 July 2021.
- A payment was made to $354.1 for $25.1 million for Q1 2024–25 and $12.4 million for Q1 2021–22.
- Payment amounts are published on the dcceew.gov.au website.
- A review of the payment rate settings is currently underway, as built into the original policy design of the scheme. The review will ensure the refinery-specific payment methodology—which determines when and how payments are triggered—remains fit-for-purpose and is reflective of current Australian refining market conditions.

# Modernisation of Australian fuel legislation

- The Regulatory Reform Omnibus Bill 2025, which passed in November 2025, includes three fuel security measures. These amendments will improve flexibility and ensure timely government response to potential liquid fuel disruptions.
- The Department of Climate Change, Energy, the Environment and Water is also continuing work to review and modernise the Liquid Fuel Emergency Act 1984.

# Diesel Exhaust Fluid (DEF)

- Diesel exhaust fluid is critical to the operation of trucking and other diesel vehicles, and it lowers noxious emissions which are harmful to people and the environment.
- The Government has implemented measures so the Australian transport sector can better weather volatility in the future. The measures include:
- $41.9 million for a government controlled strategic stockpile of 7,500 tonnes of technical grade urea, the key input to diesel exhaust fluid, providing an additional five weeks of supply beyond industry stock levels in case of a supply shortage to 30 June 2030 (partially delivered).

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- $4.6 million to support collection of voluntary data provided by industry of technical grade urea and diesel exhaust fluid domestic stocks (delivered).
- The Australian diesel exhaust fluid market is currently well supplied and domestic stock levels are stable.
- China restricted exports of technical grade urea for most of 2024 and part of 2025. During this time, the Australian DEF industry diversified imports of technical grade urea and held higher commercial stocks. Industry have been assisted in this task by the Government's market transparency measures.

# s. 47(1)(b)

## Middle East conflict and impact on energy markets

- Australia imports only small volumes of crude oil (2% of total in 2024-25) and refined products (2% of total in 2024-25) directly from countries in the Middle East, mostly from United Arab Emirates and Oman.
- However, we do have significant indirect exposure via the dependence on the Middle East by our major Asian suppliers of fuel.
- Global oil markets are currently well-supplied. The Middle East accounted for around 40% of global crude oil and condensate seaborne exports in 2025.

## Sanctions on Russian Oil (see QB26-00092 for additional information)

- In 2022 Australia imposed a blanket import ban on Russian fossil fuels and related products. Australia has also imposed targeted sanctions on Russian 'shadow' fleet vessels and joined other countries in lowering the Russian Oil Price Cap to drive down the market value of Russian crude oil.
- Currently, Australia does not impose sanctions to restrict the importation of petroleum products that are refined in third countries utilising Russian crude.

## Fuel prices

- Fuel prices in Australia reflect international benchmarks.
- Global oil prices fluctuated in 2025, averaging around US$69 a barrel (Brent). As of mid-February 2026, Brent crude prices were around US$71 a barrel.

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- The national average retail **petrol price** for the week ending **15 February** 2026 was **167 cents per litre**, compared with the average of 180 cents per litre in 2025.
- Prior to the 2022 temporary excise cut, the national average petrol price peaked at 213 cents per litre for the week ending 20 March 2022.
- After the 2022 temporary excise cut, the national average petrol price peaked at 212 cents per litre for the week ending 10 July 2022.

- The national average **diesel price** for the week ending **15 February** 2026 was **181 cents per litre**, compared with the average of 186 cents per litre in **2025**.
- The national average diesel price peaked at 236 cents per litre for the week ending 3 July 2022 and then again for the week ending 30 October 2022.

- The excise rate as of **February 2026** is **52.6 cents per litre**.

- The Government does not regulate fuel prices but the Australian Competition &amp; Consumer Commission does closely monitor them to ensure that consumers are not paying more for fuel than they should.

- Fuel prices in Australia remain among the lowest in the Organisation for Economic Co-operation and Development reflecting relatively lower taxes on fuel.

## Import reliance

- Over 90% of Australia's fuel use is based on imports, both directly as refined product and indirectly as crude and other feedstock to our refineries.

- Nearly 80% of Australia's refinery feedstock is also imported.

- Key sources of refined products for Australia include Korea, Singapore, Malaysia, India, Taiwan and China.

- Key sources of crude and other refinery feedstock for Australia include Malaysia, the United States, Vietnam, Brunei and New Zealand.

## Low carbon liquid fuels (LCLF)

- LCLF production and use will play an important part of our move towards net zero and long-term fuel security.

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- LCLF can be produced from waste materials, biomass or renewable hydrogen. Examples include renewable diesel, sustainable aviation fuel, and e-fuels.
- LCLF currently makes up less than 1 per cent of Australia's fuel use. Industry is considering projects, but none have reached final investment decision.
- Global policy is encouraging LCLF investment in other jurisdictions, that risks Australia being a feedstock exporter only.
- Under the Future Made in Australia plan, the Government has committed to investing in building a LCLF industry in Australia.
- The Cleaner Fuels Program is a production-linked incentive that will target support toward LCLF projects that are ready to go to final investment decision and commercial production in the near future.
- The Future Made in Australia Innovation Fund, which launched in December 2025, will support ongoing innovation and technology development that will help realise the potential of Australia's comparative advantages.
- These programs have been informed through consultation, and we will continue to work with industry to establish a domestic industry and market.

## Australia's fuel quality

- The Government has improved fuel quality to enable the latest vehicle emissions technology, reduce air pollution, and deliver better health outcomes.
- From 15 December 2025, new national petrol standards are in place, projected to save $6.1 billion in health and fuel costs to 2040.
- The new standards introduced new limits on aromatics and sulfur for petrol.
- Aromatics limits in 95 Research Octane Number (RON) petrol from 45% to 35%.
- Sulfur limits in all petrol grades down to 10 parts per million (ppm) from 150ppm for 91 RON, and 50ppm in 95/98 RON.
- Cleaner fuels also enable Euro 6d noxious-emissions standards and improve access to more fuel-efficient vehicles, with health and efficiency benefits to outweigh any price impacts.
- Significant infrastructure upgrades at Australia's two remaining refineries—€47G(1) are being delivered through the $302

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million Refinery Upgrades Program, alongside more than s. 47(1)(b) in private investment.

- These upgrades ensure our refineries can produce higher-quality fuels, and will support our fuel security.

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# LIQUID FUELS

## ISSUE/QUESTION

The Australian Government is committed to safeguarding Australia’s liquid fuel security.

## POLITICAL TALKING POINTS:

Office Use Only

![img-1.jpeg](img-1.jpeg)

Contact Officer: Cris Cano
Phone: xcris12@chl.nl
Responsible Division: Gas and Liquid Fuels Division (GLFD) G2
QB26-000047

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Date updated: 23 March 2026
Date reviewed: 23 March 2026

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# KEY POINTS:

- The Australian Government is committed to ensuring we have access to the fuel we need to keep Australia moving.
- Australia relies on liquid fuels for over half of our energy demand. While the use of alternative fuels and new vehicle technology is increasing, traditional liquid fuels will continue to play an important role in Australia's energy mix and in supporting our critical services over the coming years.
- The Government has taken steps to support efficiency, increase uptake of low carbon liquid fuels and electrify vehicles, which will reduce our dependence on foreign oil and cut emissions.
- The Government's fuel security initiatives include:
- maintaining domestic reserves through the Minimum Stockholding Obligation (MSO) that commenced on 1 July 2023;
- maintaining domestic refining capability through the Fuel Security Services Payment; and
- reviewing our liquid fuel emergency legislation to ensure Australia's response capabilities to severe supply disruption events are appropriate.
- The Government is closely monitoring developments in the Middle East and talking daily to fuel market participants. Australian fuel stocks remain at normal levels, our fuel supply chains are diverse, and we are well placed to respond to pressures.
- Fuel continues to arrive in Australia in the quantities and frequency we need and expect. Ship tracking shows sufficient fuel on its way.
- Most Australians are getting fuel when and where they need it. And where that's not happening, the Government is working with the fuel industry to address local disruptions.
- Recent actions taken by the Government include appointing a Fuel Supply Taskforce Coordinator, supporting local refineries, reducing the stockholding obligation for diesel and petrol conditional on getting more fuel to regional areas, authorising major fuel suppliers to coordinate to manage supply chain impacts, amending fuel quality standards to allow more fuel to reach the Australian market, and contributing to global collective actions.
- Fuel prices have increased significantly since conflict escalated. It is too soon to know the impact on fuel prices in Australia – the longer the conflict lasts, the higher the upward risk for prices. The Australian Competition &amp; Consumer

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Commission (ACCC) has increased monitoring of price impacts and increased penalties for false or misleading conduct and cartel behaviour.

- The Government has implemented measures to strengthen security of diesel exhaust fluid (DEF).
- Low carbon liquid fuels will deliver decarbonisation options for fuel reliant sectors that cannot electrify or switch to hydrogen in the medium-term. We are supporting the development of a local industry, which will drive new jobs in the net zero economy and bolster our sovereign fuel capability and resilience.

- On 17 September 2025 we announced investment in the $1.1 billion Cleaner Fuels Program to kick-start low carbon liquid fuel production in Australia. We are working to finalise the program's design ahead of opening for applications.
- This builds on the $250 million we have allocated under the Future Made in Australia Innovation Fund to support pre-commercial innovation, demonstration and deployment of low carbon liquid fuels.

# BACKGROUND:

## Managing Australia's fuel security

## A national fuel reserve through a stockholding obligation

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- petrol – 24 days for refiners, 27 days for importers
- diesel – 20 days for refiners, 32 days for importers
- jet fuel – 24 days for refiners, 27 days for importers.

- For 2025–26, the MSO requires a minimum of 1,067 megalitres (ML) of petrol, 2,742 ML of diesel and 663 ML of jet fuel to be held collectively by industry.
- A 20 per cent reduction of the MSO for diesel and petrol is currently in place for most eligible entities (equivalent to 519 ML of diesel and gasoline combined). This release is enabling entities to quickly tap into reserves to get fuel out to areas facing shortfalls.

## Current liquid fuel stocks

- In 2025, Australia's stocks of diesel, petrol and jet fuel were collectively the highest they have ever been.
- These domestic fuel reserves guarantee a minimum buffer of around 4 to 5 weeks from a complete disruption of fuel supply – for example, total isolation of Australia from global oil trade.
- Our stocks will provide much longer resilience for less extreme scenarios.
- Australia's stocks of fuel are currently well above the required level.
- As of 17 March 2026 (latest available), stocks held by industry under the Minimum Stockholding Obligation (MSO) were equivalent to 38 days for petrol, 30 days for jet fuel and 30 days for diesel (at normal rates of consumption).
- On average in December quarter 2025, total industry stocks held under the MSO were equivalent to 38 days for petrol, 29 days for jet fuel, and 32 days for diesel (at normal rates of consumption).
- Stocks held under the MSO include finished product stocks on land in Australia and in domestic/coastal waters, as well as finished product stocks on water in Australia's exclusive economic zone and some crude/unfinished product stocks at refineries converted to their finished product equivalent.
- These additional categories of stock means the MSO measure is more comprehensive for fuel security purposes than other measures.

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- As well as boosting total stocks, the MSO has significantly raised the floor – even our lowest reported diesel stocks in 2024 were 20% higher than the lowest point in 2022 before the MSO.

## Australia's non-compliance with International Energy Agency (IEA) 90 day rule

- Even though Australia is not in full compliance with the IEA's 90 day obligation, we are fuel secure.
- We are now holding more stocks of aviation fuel, petrol and diesel than any time in the last 15 years.
- We have strengthened Australia's fuel security with practical and cost-conscious measures, like the Minimum Stockholding Obligation, which have been praised by the IEA.
- These domestic fuel reserves guarantee a minimum buffer of around 4 to 5 weeks from a complete disruption of fuel supply – for example, total isolation of Australia from global oil trade.
- Our stocks will provide much longer resilience for less extreme scenarios.
- We are ready to consider contributions to IEA collective actions, as Australia has in the past.
- Australia has contributed to the March 2026 global collective action to release 400 million barrels of oil to market through a temporary reduction in the Minimum Stockholding Obligation, which is equivalent to up to 5 million barrels.

## International Energy Agency days of net import cover

- Australia had 49 International Energy Agency (IEA) days of net imports cover at the end of January 2026. IEA days averaged 50 days in 2024-25, 53 days in 2023-24, 58 days in 2022-23, 70 days in 2021-22, 67 days in 2020-21 and 57 days in 2019-20.
- IEA days of net import cover measure Australia's end of month total oil stocks in days based on how much oil we import minus how much we export, known as our daily net oil imports.
- Net imports are different to consumption, which along with the different types of stocks included, means that days of stocks held under the MSO are not comparable to IEA days.
- Australia's net oil imports rose by around 3% in 2024 (the base year of the figure) as our fuel demand rose and upstream exports fell. As a result, stocks measured in IEA days of net import cover have fallen.

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- The fall in Australia's IEA days does not mean our fuel stocks have reduced. Australia held more stocks of diesel on average in 2025 than ever before.

## US Strategic Petroleum Reserve and release to support 2022 International Energy Agency collective actions

- The Australian and US governments have a lease in place that allows Australia to hold oil in the US Strategic Petroleum Reserve until 2030. However, Australia does not currently hold any oil in the US Strategic Petroleum Reserve.
- Australia held around 1.7 million barrels of oil in the Strategic Petroleum Reserve that was released to the market in response to the International Energy Agency's March 2022 collective action in response to the impact of the war in Ukraine on global fuel markets.

## Boosting Australia's Diesel Storage Program

- The Boosting Australia's Diesel Storage Program provided support to industry to construct additional diesel storage capacity in Australia and create jobs.
- The Program, along with other industry investment, has delivered an increase in national diesel storage to support our fuel reserves required by the Minimum Stockholding Obligation.

## Fuel Security Services Payment

- The Fuel Security Services Payment provides eligible refiners with a payment of up to 1.8 cents per litre under the Fuel Security Act 2021. It helps refiners manage their downside risks in exchange for them continuing to produce critical fuels: diesel, petrol and jet fuel.
- Up to $2.047 billion in funding to 2030 is available to refiners in the worst-case scenario.
- Payments are carefully calibrated to external market conditions, switching on and off to provide Government support only when refinery margins are poor.
- There have been two payments since the scheme began on 1 July 2021.
- A payment was made to US$2 for $25.1 million for Q1 2024–25 and $12.4 million for Q1 2021–22.
- Payment amounts are published on the dcceew.gov.au website.
- Following a detailed review of the payment rate settings, the Government has adjusted settings in March 2026. The updated settings ensure the scheme reflects up

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to date market conditions, that Australian refineries operate in. The payment cap remains at 1.8 cents per litre.

## Modernisation of Australian fuel legislation

## Diesel Exhaust Fluid (DEF)

- $41.9 million for a government controlled strategic stockpile of 7,500 tonnes of technical grade urea, the key input to diesel exhaust fluid, providing an additional five weeks of supply beyond industry stock levels in case of a supply shortage to 30 June 2030 (partially delivered).
- $4.6 million to support collection of voluntary data provided by industry of technical grade urea and diesel exhaust fluid domestic stocks (delivered).

- The Australian diesel exhaust fluid market is currently well supplied and domestic stock levels are stable.
- China restricted exports of technical grade urea for most of 2024 and part of 2025. During this time, the Australian DEF industry diversified imports of technical grade urea and held higher commercial stocks. Industry have been assisted in this task by the Government's market transparency measures.
- If asked about sovereign manufacturing program of technical grade urea: The successful applicant for a previously announced competitive grants program to support DEF security has withdrawn their application due to an inability to prove their concept.

## Middle East conflict and impact on energy markets

- Conflict in the Middle East has escalated since 28 February 2026. Disruptions to oil flows through the Strait of Hormuz have forced some operators to reduce crude and refinery production. The Strait continues to be effectively closed.

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- This is the largest supply disruption in the history of the global oil market.
- In 2025, around 25% of global seaborne oil trade was through the Strait of Hormuz.

- Global oil markets were well-supplied prior to the conflict, but in the absence of a resumption of shipping flows, supply losses are set to increase.
- Australia imports only small volumes of crude oil (1% of total in 2025) and refined products (2% of total in 2025) directly from countries in the Middle East, mostly from United Arab Emirates and Oman.
- However, we do have significant indirect exposure via the dependence on the Middle East by our major Asian suppliers of fuel.
- Global crude and refined product prices are volatile and generally rising.
- Brent crude oil prices were US$117 a barrel at close of trade on 20 March, up from US$71 a barrel on 27 February. Prices averaged US$69 in 2025.
- The cost of shipping crude from the Middle East to Asia has also risen sharply since the conflict began, as has the price of refined product in Singapore.

- It is too soon to know the impact on fuel prices in Australia, but we should expect prices to rise further as recent international increases flow through. The longer the conflict lasts, the higher the upward risk for prices.
- Fuel prices have already increased significantly since the conflict began. The Treasurer has written to the Australian Competition and Consumer Commission to help ensure fuel retailers don't use events in the Middle East to price gouge consumers.

- Recent actions taken by the Government to help fuel get to where it is needed include appointing a Fuel Supply Taskforce Coordinator, supporting local refineries, reducing the stockholding obligation for diesel and petrol conditional on getting more fuel to regional areas, authorising major fuel suppliers to coordinate to manage supply chain impacts, amending fuel quality standards to allow more fuel to reach the Australian market, and contributing to global collective actions.

# Sanctions on Russian Oil (see QB26-000092 for additional information)

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- Currently, Australia does not impose sanctions to restrict the importation of petroleum products that are refined in third countries utilising Russian crude.

## Fuel prices

- Fuel prices in Australia reflect international benchmarks.
- Global and domestic prices have increased since the escalation of conflict in the Middle East in late February.
- As of 20 March 2026, Brent crude oil prices were US$117 a barrel.
- Global oil prices averaged around US$69 a barrel (Brent) in 2025.
- Fuel prices in Australia have increased significantly in the past three weeks. Petrol prices in Sydney have increased by nearly 60 cents per litre on average since 27 February, while diesel prices have increased by nearly 120 cents per litre on average according to Motormouth.
- The national average retail petrol price for the week ending 15 March 2026 was 220 cents per litre, compared with the average of 180 cents per litre in 2025.
- Prior to the 2022 temporary excise cut, the national average petrol price peaked at 213 cents per litre for the week ending 20 March 2022.
- After the 2022 temporary excise cut, the national average petrol price peaked at 212 cents per litre for the week ending 10 July 2022.
- The national average diesel price for the week ending 15 March 2026 was 246 cents per litre, compared with the average of 186 cents per litre in 2025.
- The national average diesel price peaked at 236 cents per litre for the week ending 3 July 2022 and then again for the week ending 30 October 2022.
- The excise rate as of February 2026 is 52.6 cents per litre.
- The Government does not regulate fuel prices but the Australian Competition &amp; Consumer Commission does closely monitor them to ensure that consumers are not paying more for fuel than they should.
- Fuel prices in Australia remain among the lowest in the Organisation for Economic Co-operation and Development reflecting relatively lower taxes on fuel.

## Import reliance

- Over 90% of Australia's fuel use is based on imports, both directly as refined product and indirectly as crude and other feedstock to our refineries.

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- In 2024-25, Australia relied on direct imports for over 80% of our refined fuel consumption. The increase is predominantly due to the shutdown of domestic refineries – including the BP refinery in Western Australia and Mobil in Victoria, and continued growth in fuel demand.
- Nearly 80% of Australia's refinery feedstock is also imported.
- Key sources of refined products for Australia include Korea, Singapore, Malaysia, India, Taiwan and China.
- Key sources of crude and other refinery feedstock for Australia include Malaysia, the United States, Vietnam, Brunei and New Zealand.

## Low carbon liquid fuels (LCLF)

- LCLF production and use will play an important part of our move towards net zero and long-term fuel security.
- LCLF can be produced from waste materials, biomass or renewable hydrogen. Examples include renewable diesel, sustainable aviation fuel, and e-fuels.
- LCLF currently makes up less than 1 per cent of Australia's fuel use. Industry is considering projects, but none have reached final investment decision.
- Global policy is encouraging LCLF investment in other jurisdictions, that risks Australia being a feedstock exporter only.
- Under the Future Made in Australia plan, the Government has committed to investing in building a LCLF industry in Australia.
- The Cleaner Fuels Program is a production-linked incentive that will target support toward LCLF projects that are ready to go to final investment decision and commercial production in the near future.
- The Future Made in Australia Innovation Fund, which launched in December 2025, will support ongoing innovation and technology development that will help realise the potential of Australia's comparative advantages.
- These programs have been informed through consultation, and we will continue to work with industry to establish a domestic industry and market.

## Australia's fuel quality

- The Government has temporarily amended petrol quality standards to allow higher sulfur levels which will help more petrol reach the Australian market. This short term

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change from 10ppm to 50ppm of sulfur poses little risk to vehicles, health or the environment.

- Prior to the temporary change, the Government had improved fuel quality to enable the latest vehicle emissions technology, reduce air pollution, and deliver better health outcomes.
- Improvements had commenced on 15 December 2025, projected to save $6.1 billion in health and fuel costs to 2040.
- The new standards introduced new limits on aromatics and sulfur for petrol.
- Aromatics limits in 95 Research Octane Number (RON) petrol from 45% to 35%.
- Sulfur limits in all petrol grades down to 10 parts per million (ppm) from 150ppm for 91 RON, and 50ppm in 95/98 RON.
- Cleaner fuels also enable Euro 6d noxious-emissions standards and improve access to more fuel-efficient vehicles, with health and efficiency benefits to outweigh any price impacts.
- Significant infrastructure upgrades at Australia's two remaining refineries—s.47G(1) —are being delivered through the $302 million Refinery Upgrades Program, alongside more than s.47(1)(b) in private investment.
- These upgrades ensure our refineries can produce higher-quality fuels, and will support our fuel security.

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# LIQUID FUELS

## ISSUE/QUESTION

The Australian Government is committed to safeguarding Australia’s liquid fuel security.

## POLITICAL TALKING POINTS:

Office Use Only

![img-2.jpeg](img-2.jpeg)

Contact Officer: Cris Cano
Phone:
**OFFICIAL**
Responsible Division: Gas and Liquid Fuels Division (GLFD) G2
QB26-000047

Date updated:
1 April 2026

Date reviewed:
1 April 2026

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# KEY POINTS:

- The Australian Government is committed to ensuring we have access to the fuel we need to keep Australia moving.
- Australia relies on liquid fuels for over half of our energy demand. While the use of alternative fuels and new vehicle technology is increasing, traditional liquid fuels will continue to play an important role in Australia's energy mix and in supporting our critical services over the coming years.
- The Government has taken steps to support efficiency, increase uptake of low carbon liquid fuels and electrify vehicles, which will reduce our dependence on foreign oil and cut emissions.
- The Government's fuel security initiatives include:
- maintaining domestic reserves through the Minimum Stockholding Obligation (MSO) that commenced on 1 July 2023;
- maintaining domestic refining capability through the Fuel Security Services Payment; and
- reviewing our liquid fuel emergency legislation to ensure Australia's response capabilities to severe supply disruption events are appropriate.
- The Government is closely monitoring developments in the Middle East and talking daily to fuel market participants. Australian fuel stocks remain at normal levels, our fuel supply chains are diverse, and we are well placed to respond to pressures.
- Fuel continues to arrive in Australia in the quantities and frequency we need and expect. Ship tracking shows sufficient fuel on its way.
- Most Australians are getting fuel when and where they need it. And where that's not happening, the Government is working with the fuel industry to address local disruptions.
- As of Wednesday morning, 212 retail sites nationally were without diesel and 178 without regular unleaded petrol (Informed sources).
- Recent actions taken by the Government include establishing new fuel security powers to keep fuel flowing, appointing a Fuel Supply Taskforce Coordinator, supporting local refineries, reducing the stockholding obligation for diesel and petrol conditional on getting more fuel to regional areas, authorising major fuel suppliers to coordinate to manage supply chain impacts, amending fuel quality standards to allow more diesel and petrol to

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reach the Australian market, engaging with key energy trading partners, and contributing to global collective actions.

- Fuel prices have increased significantly since conflict escalated. It is too soon to know the impact on fuel prices in Australia – the longer the conflict lasts, the higher the upward risk for prices. The Australian Competition &amp; Consumer Commission (ACCC) has increased monitoring of price impacts and increased penalties for false or misleading conduct and cartel behaviour.

- The Government will halve the fuel excise to 26.3 cents per litre and reduce the heavy vehicle road user charge to zero for three months commencing 1 April 2026, while encouraging voluntary measures to reduce fuel demand.

- The National Fuel Security Plan announced on 30 March establishes a coordinated, four-stage framework for managing the global energy shock across all jurisdictions.

- Australia is currently at Level 2 – Keeping Australia moving – meaning fuel supply continues to operate effectively but localised supply disruptions occur. Governments are focused on maintaining fuel supply continuity and market confidence while preparing for potential escalation if conditions deteriorate.

- The Government has implemented measures to strengthen security of diesel exhaust fluid (DEF).

- Low carbon liquid fuels will deliver decarbonisation options for fuel reliant sectors that cannot electrify or switch to hydrogen in the medium-term. We are supporting the development of a local industry, which will drive new jobs in the net zero economy and bolster our sovereign fuel capability and resilience.

- This builds on the $250 million we have allocated under the Future Made in Australia Innovation Fund to support pre-commercial innovation, demonstration and deployment of low carbon liquid fuels.

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## BACKGROUND:

### Managing Australia's fuel security

### A national fuel reserve through a stockholding obligation

- The Minimum Stockholding Obligation (MSO) commenced on 1 July 2023 and guarantees minimum stock levels of critical fuels are held by industry as domestic fuel reserves.
- The MSO requires Australia's two major refineries and all major importers of refined fuels to hold baseline stocks of:
- petrol – 24 days for refiners, 27 days for importers
- diesel – 20 days for refiners, 32 days for importers
- jet fuel – 24 days for refiners, 27 days for importers.
- For 2025–26, the MSO requires a minimum of 1,067 megalitres (ML) of petrol, 2,742 ML of diesel and 663 ML of jet fuel to be held collectively by industry.
- A 20 per cent reduction of the MSO for diesel and petrol is currently in place for most eligible entities (equivalent to around 760 ML of diesel and gasoline combined). This release is enabling entities to quickly tap into reserves to get fuel out to areas facing shortfalls.

### Current liquid fuel stocks

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- Our stocks will provide much longer resilience for less extreme scenarios.

- Australia's stocks of fuel are currently well above the required level.

- As of 24 March 2026 (latest available), stocks held by industry under the Minimum Stockholding Obligation (MSO) were equivalent to 39 days for petrol, 30 days for jet fuel and 30 days for diesel (at normal rates of consumption).

- On average in December quarter 2025, total industry stocks held under the MSO were equivalent to 38 days for petrol, 29 days for jet fuel, and 32 days for diesel (at normal rates of consumption).

- These additional categories of stock means the MSO measure is more comprehensive for fuel security purposes than other measures.

- As well as boosting total stocks, the MSO has significantly raised the floor – even our lowest reported diesel stocks in 2024 were 20% higher than the lowest point in 2022 before the MSO.

# Australia's non-compliance with International Energy Agency (IEA) 90 day rule

- Even though Australia is not in full compliance with the IEA's 90 day obligation, we are fuel secure.

- We are now holding more stocks of aviation fuel, petrol and diesel than any time in the last 15 years.

- We have strengthened Australia's fuel security with practical and cost-conscious measures, like the Minimum Stockholding Obligation, which have been praised by the IEA.

- These domestic fuel reserves guarantee a minimum buffer of around 4 to 5 weeks from a complete disruption of fuel supply – for example, total isolation of Australia from global oil trade.

- Our stocks will provide much longer resilience for less extreme scenarios.

- We are ready to consider contributions to IEA collective actions, as Australia has in the past.

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- Australia has contributed to the March 2026 global collective action to release 400 million barrels of oil to market through a temporary reduction in the Minimum Stockholding Obligation, which is equivalent to up to 5 million barrels.

## International Energy Agency days of net import cover

- Net imports are different to consumption, which along with the different types of stocks included, means that days of stocks held under the MSO are not comparable to IEA days.

- Australia's net oil imports rose by around 3% in 2024 (the base year of the figure) as our fuel demand rose and upstream exports fell. As a result, stocks measured in IEA days of net import cover have fallen.
- The fall in Australia's IEA days does not mean our fuel stocks have reduced. Australia held more stocks of diesel on average in 2025 than ever before.

## US Strategic Petroleum Reserve and release to support 2022 International Energy Agency collective actions

## Boosting Australia's Diesel Storage Program

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## Fuel Security Services Payment

- The Fuel Security Services Payment provides eligible refiners with a payment of up to 1.8 cents per litre under the Fuel Security Act 2021. It helps refiners manage their downside risks in exchange for them continuing to produce critical fuels: diesel, petrol and jet fuel.
- Up to $2.047 billion in funding to 2030 is available to refiners in the worst-case scenario.
- Payments are carefully calibrated to external market conditions, switching on and off to provide Government support only when refinery margins are poor.
- There have been two payments since the scheme began on 1 July 2021.
- A payment was made to Viva for $25.1 million for Q1 2024–25 and $12.4 million for Q1 2021–22.
- Payment amounts are published on the dcceew.gov.au website.
- Following a detailed review of the payment rate settings, the Government has adjusted settings in March 2026. The updated settings ensure the scheme reflects up to date market conditions, that Australian refineries operate in. The payment cap remains at 1.8 cents per litre.

## Modernisation of Australian fuel legislation

## Liquid Fuel Emergency Act

- The Liquid Fuel Emergency Act 1984 has never been activated. It allows the Governor General to declare a national liquid fuel emergency.
- This may occur if there is an actual or likely shortage of fuel with national implications.
- A declaration is made upon advice from the Minister for Energy and consultation with state and territory energy ministers.
- The National Oil Supplies Emergency Committee (NOSEC) is providing advice to governments on issues regarding supply of crude oil and petroleum products. NOSEC is meeting regularly.

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- If a national liquid fuel emergency is declared, the Minister for Energy can legally direct fuel companies to manage stocks, identify essential users to receive priority fuel access and introduce fuel rationing.

## Diesel Exhaust Fluid (DEF)

## Middle East conflict and impact on energy markets

- This is the largest supply disruption in the history of the global oil market.
- In 2025, around 25% of global seaborne oil trade was through the Strait of Hormuz.

- Global oil markets were well-supplied prior to the conflict, but without resumption of shipping flows, supply losses are set to increase.

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- Australia imports only small volumes of crude oil (1% of total in 2025) and refined products (2% of total in 2025) directly from countries in the Middle East, mostly from United Arab Emirates and Oman.
- However, we do have significant indirect exposure via the dependence on the Middle East by our major Asian suppliers of fuel.
- Fuel continues to arrive in Australia in the quantities and frequency we need and expect, with ship tracking showing sufficient fuel on its way.
- Global crude and refined product prices are volatile and generally rising.

- Brent crude oil prices were US$127 a barrel at close of trade on 31 March, up from US$71 a barrel on 27 February. Prices averaged US$69 in 2025.
- The cost of shipping crude from the Middle East to Asia has also risen sharply since the conflict began, as has the price of refined product in Singapore (which drives fuel prices here in Australia).

- Fuel prices have already increased significantly since the conflict began, especially for diesel. The Treasurer has written to the Australian Competition and Consumer Commission to help ensure fuel retailers don't use events in the Middle East to price gouge consumers.
- On 30 March 2026, the Government announced it will halve the fuel excise to 26.3 cents per litre and reduce the heavy vehicle road user charge to zero for three months commencing 1 April 2026, while encouraging voluntary measures to reduce fuel demand.

- The Government announced the National Fuel Security Plan on 30 March 2026 to establish a coordinated, four-stage framework for managing the global energy shock across all jurisdictions.

- Australia is currently at Level 2 - Keeping Australia moving - meaning fuel supply continues to operate effectively but localised supply disruptions occur. Governments are focused on maintaining fuel supply continuity and market confidence while preparing for potential escalation if conditions deteriorate.

- On 28 March 2026 the Government announced it would introduce legislation to enable it to underwrite additional fuel cargoes and other vital strategic reserves to help acquire additional supply. This will allow Government to enter contracts of

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insurance or indemnity, give guarantees, make loans, or enter arrangements needed to help secure fuel supply from international markets.

- Other recent actions taken by the Government include establishing new fuel security powers to keep fuel flowing, appointing a Fuel Supply Taskforce Coordinator, supporting local refineries, reducing the stockholding obligation for diesel and petrol conditional on getting more fuel to regional areas, authorising major fuel suppliers to coordinate to manage supply chain impacts, amending fuel quality standards to allow more diesel and petrol to reach the Australian market, engaging with key energy trading partners, and contributing to global collective actions.

## Sanctions on Russian Oil (see QB26-000092 for additional information)

## Fuel prices

- Fuel prices in Australia reflect international benchmarks.
- Global and domestic prices have increased significantly since the escalation of conflict in the Middle East in late February.
- As of 31 March 2026, Brent crude oil prices were US$127 a barrel.
- Global oil prices averaged around US$69 a barrel (Brent) in 2025.
- The national average retail petrol price for the week ending 29 March 2026 was 253 cents per litre, compared with the average of 180 cents per litre in 2025.
- Prior to the 2022 temporary excise cut, the national average petrol price previously peaked at 213 cents per litre for the week ending 20 March 2022.
- After the 2022 temporary excise cut, the national average petrol price peaked at 212 cents per litre for the week ending 10 July 2022.
- The national average diesel price for the week ending 29 March 2026 was 310 cents per litre, compared with the average of 186 cents per litre in 2025.

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- The national average diesel price previously peaked at 236 cents per litre for the week ending 3 July 2022 and then again for the week ending 30 October 2022.

- On 30 March 2026, the Government announced it will halve the fuel excise to 26.3 cents per litre and reduce the heavy vehicle road user charge to zero for three months commencing 1 April 2026, while encouraging voluntary measures to reduce fuel demand.

- Prior to the temporary cut, the excise rate as of February 2026 is 52.6 cents per litre.

- Fuel prices in Australia remain among the lowest in the Organisation for Economic Co-operation and Development reflecting relatively lower taxes on fuel.

## Import reliance

- Over 90% of Australia's fuel use is based on imports, both directly as refined product and indirectly as crude and other feedstock to our refineries.

- Nearly 80% of Australia's refinery feedstock is also imported.

- Key sources of refined products for Australia include Korea, Singapore, Malaysia, India, Taiwan and China.

- Key sources of crude and other refinery feedstock for Australia include Malaysia, the United States, Vietnam, Brunei and New Zealand.

## Low carbon liquid fuels (LCLF)

- LCLF production and use will play an important part of our move towards net zero and long-term fuel security.

- LCLF can be produced from waste materials, biomass or renewable hydrogen. Examples include renewable diesel, sustainable aviation fuel, and e-fuels.

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- LCLF currently makes up less than 1 per cent of Australia's fuel use. Industry is considering projects, but none have reached final investment decision.
- Global policy is encouraging LCLF investment in other jurisdictions, that risks Australia being a feedstock exporter only.
- Under the Future Made in Australia plan, the Government has committed to investing in building a LCLF industry in Australia.
- The Cleaner Fuels Program is a production-linked incentive that will target support toward LCLF projects that are ready to go to final investment decision and commercial production in the near future.
- The Future Made in Australia Innovation Fund, which launched in December 2025, will support ongoing innovation and technology development that will help realise the potential of Australia's comparative advantages.
- These programs have been informed through consultation, and we will continue to work with industry to establish a domestic industry and market.

# Australia's fuel quality

- The Government has temporarily amended diesel quality standards to allow a lower minimum flash point level which will give us greater access to international supply options and facilitate higher levels of domestic diesel production.

- Under this measure diesel with a flash point of 60.5 degrees Celsius (°C) may be supplied to the Australian market until 30 September 2026. This represents a temporary reduction from the current 61.5°C limit.
- Flashpoint changes have no impact on engines or emissions. Australia typically has a slightly higher temperatures flashpoint owing to our hotter climate however when the flashpoint was last lowered in 2020, we saw no adverse impact on engines or emissions.
- This measure does not change how diesel is classified under the Australian Dangerous Goods Code and does not require any changes to storage or handling protocols.

- The Government has also temporarily amended petrol quality standards to allow higher sulfur levels which will help more petrol reach the Australian market. This short term change from 10ppm to 50ppm of sulfur poses little risk to vehicles, health or the environment.

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- Prior to the temporary change, the Government had improved fuel quality to enable the latest vehicle emissions technology, reduce air pollution, and deliver better health outcomes.
- Improvements had commenced on 15 December 2025, projected to save $6.1 billion in health and fuel costs to 2040.
- The new standards introduced new limits on aromatics and sulfur for petrol.
- Aromatics limits in 95 Research Octane Number (RON) petrol from 45% to 35%.
- Sulfur limits in all petrol grades down to 10 parts per million (ppm) from 150ppm for 91 RON, and 50ppm in 95/98 RON.
- Cleaner fuels also enable Euro 6d noxious-emissions standards and improve access to more fuel-efficient vehicles, with health and efficiency benefits to outweigh any price impacts.
- Significant infrastructure upgrades at Australia's two remaining refineries—s:47G(1) —are being delivered through the $302 million Refinery Upgrades Program, alongside more than s:47(1)(b) in private investment.
- These upgrades ensure our refineries can produce higher-quality fuels, and will support our fuel security.

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