The conflict in the Middle East is testing international supply chains once again, with Australians feeling the pinch at the bowser.
Brent crude oil prices – a key determinant for Australian petrol prices – have surged above $US80 per barrel for the first time since January 2025, and economists have warned of a 40-cents-a-litre surge in the coming weeks.
Despite this, Federal Minister for Climate Change and Energy Chris Bowen was quick to hose down concerns during a press round this week.
He pointed reporters to the minimum stockholding obligation the Federal Government instituted in 2023. This requires fuel importers and refiners to hold the following baseline stock levels:
- gasoline (24 days for refiners, 27 days for importers)
- kerosene (24 days for refiners, 27 days importers)
- diesel (20 days for refiners, 32 days for importers).
“I’m pleased to say that we are currently in excess of the minimum stock obligations – 36 days’ worth of petrol, 34 days’ worth of diesel, and 32 days’ worth of jet fuel on hand as we speak,” he said.
“That’s in addition to the petrol and diesel that’s in service stations sitting in tanks around the country as we speak and, of course, the petrol that’s already in cars.”
Bowen said Australian refiners have assured him that they hold confidence in oil supplies through to May.
The current climate does beg the question as to what self-sufficiency and -consumption looks like – a reality that can only be achieved through the adoption of electric vehicles (EVs).
A journalist posed this question to Bowen.
“The most important thing we can do in the short term is, of course, what we’ve done in our minimum stock obligation,” Bowen said.
“More broadly, the most secure form of energy for Australia is our renewable energy. Nobody, whether it be Russia or Iran or anyone else, can interfere with (this). That is good for energy security, including the drive towards electric vehicles.”
Bowen said EV sales had increased from 2 per cent to 14 per cent since the current Labor Government came into office.
The Federal Government announced a new EV subsidy in February, where up to $60 million in discounted finance is to be offered on Hyundai and Kia EVs. Eligible customers can save between 0.5–1 per cent on their interest rate, which, for a $70,000 loan, could see $1900 in interest savings over five years.
At the same time, reports have suggested a potential reduction or phase out of the fringe benefits tax (FBT) exemption for novated-lease EVs could be coming ahead of the Federal Budget announcement in May. Novated leases see car leases paid by employers through pre-tax and post-tax salary deductions.
The projected uptake of the FBT has been significant, with estimates it could cost $5.1 billion between the 2022–23 and 2026–27 financial years (up from the initial estimate of $1.9 billion).
It’s believed high-income earners have been driving the bulk of the uptake, who are increasingly turning to salary packaging to drive down their tax burden.
Either way, the only way to be fully insulated from global supply chain disruption is to self-consume, and EVs are the only answer to that.
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