Stephen Cenatiempo:
Alright. Time to talk about all of these issues with the Assistant Minister for Productivity, Competition, Charities and Treasury and the Member for Fenner, Dr Andrew Leigh. Andrew, good morning.
Andrew Leigh:
Good morning Stephen, great to be with you.
Cenatiempo:
What is the answer here, because it wasn’t that long ago the government was telling us there was no crisis? Well, it’s pretty clear there is now, when the minister was forced to admit in parliament yesterday that at least 166 Australian service stations are without fuel?
Leigh:
Well Stephen, I often think that fuel pressures can be a bit like bank runs in that they can be self‑fulfilling, and what we’ve got now is a spike in demand but no significant issues with supply. We’ve had a handful of tankers that haven’t been able to get through…
Cenatiempo:
But hang on, hang on. The minister also said. Yeah, that’s the point. The minister said yesterday there is an issue with supply because those tankers aren’t getting through?
Leigh:
We’ve had a handful – we’ve had 6 tankers that weren’t able to get through. We’ve spoken to those fuel supply companies and they’ve secured supply from alternative sources. But what we’re seeing now is much more akin to the panic buying of toilet paper during COVID than it is to a supply crisis. We have fuel supply flowing through, we have the national fuel stockpile, and we’ve released a fifth of that from the minimum stockholding obligation. But the challenges that we’re seeing with a small proportion of fuel outlets running out of fuel is driven by spikes in demand and I don’t think it’s helpful, frankly, to be over‑blowing this issue.
We have strong supply links. The Prime Minister spoke yesterday with the head of the International Energy Agency and the Prime Minister of Singapore about securing that supply…
Cenatiempo:
But hang on Andrew. Andrew, when you say it’s not helpful to over‑blow this. We saw – petrol is approaching $3 a litre. If that’s not over – and certain peak bodies have been told by somebody in government that we’re going to be rationing fuel within 12 days. I mean when do we start over‑blowing it?
Leigh:
Well Stephen there’s 2 different issues. One is that the price of fuel has gone up. That is very clear and that is a consequence of the war in Iran, and we have urged the United States to bring that war to an end now that their principal aims have been achieved.
The other is the question of whether we have run out of fuel, and there is no evidence of that. We have strong supply coming through. Fuel is definitely more expensive than it was, this is an effect that we’re seeing around the world…
Cenatiempo:
Okay, but fuel prices in Australia…
Leigh:
The best way to ease pressure on…
Cenatiempo:
But the fuel prices went up on stocks that we already had there Australia before the crisis?
Leigh:
And the ACCC has announced that it’s commenced action against a number of fuel retailers for issues that went on in the diesel supply in regional Australia.
Cenatiempo:
Well, if that’s the case, why won’t they talk to us? Because they’ve run a mile every time I’ve approached the ACCC to come on and talk to us about what they’re actually doing to enforce this – they have run like you’ve never seen.
Leigh:
I will leave ACCC media to talk about the way in which they operate.
Cenatiempo:
Well, you’re the minister though?
Leigh:
Sometimes investigations are at a point where they’re not able to say – give details about what they’re doing. You’ll see the same thing with the Tax Office and the Federal Police when they’re doing investigations. We have a very well‑resourced ACCC which is now doing weekly fuel monitoring. Australians need to be reassured that we have a fuel stockpile and we’ll release that as we need to do in order to…
Cenatiempo:
Andrew, let me stop you there. Because I’m not asking them to comment on investigations. I’ve asked them twice to come on the program and tell us what sort of enforcement powers they have and they won’t come on and tell us that because, as most people think, the ACCC is a paper tiger with no enforcement ability?
Leigh:
Well, the ACCC has significant powers and we’ve beefed up those powers. Under Scott Morrison, fuel went to $2 a litre at the beginning of the Ukraine War. The maximum penalty they could impose was $10 million. Now thanks to Labor changes, it’s $50 million. We’ve announced we’re about to take that up to $100 million…
Cenatiempo:
Well, yesterday we saw…
Leigh:
The penalties go well beyond the cost of doing business.
Cenatiempo:
Yesterday we saw nearly every petrol station in Canberra charging the same price for petrol. What’s happening? If the ACCC has got these beefed‑up powers, how does that happen?
Leigh:
Well, the ACCC is now empowered to go after fuel retailers that are engaging in collusive behaviour or misleading Australians about the nature of the fuel. The enforcement action they’ve taken against Ampol, BP, Mobil and Viva Energy is a significant enforcement investigation and does go to questions of fuel availability in regional Australia.
But the risk here is that we’re getting to a panic cycle, much as bank runs have happened in centuries gone by and much as the toilet paper crisis happened at the beginning of COVID. We have fuel supply flowing through to Australia. Fuel is more expensive, but we are not seeing shortages in the fuel that is arriving in Australia.
Cenatiempo:
Well I don’t understand how that is the case when we know that tankers have not come through, and we’ve had China cut back its supply of jet fuel to Australia. I mean there clearly are shortages? I mean, I know the government wants to say there’s no shortages, but the evidence suggests otherwise?
Leigh:
Well Qantas has been very clear – as our largest carrier – that they’re not experiencing shortages of jet fuel. We’ve made a range of changes. We’ve changed fuel standards in order to get more fuel available onto the market. Those changes typically take 6 to 18 months, we’re progressing them in less than a week. We’ve got a Fuel Supply Coordinator, Anthea Harris, who’s going to be supporting coordination nationwide and there will be fuel supply coordinators in each state and territory…
Cenatiempo:
But what does that mean?
Leigh:
Working to get fuels to the regions when they’re in demand.
Cenatiempo:
How does adding a level of bureaucracy fix this?
Leigh:
Well, the Fuel Supply Coordinator will work with the different agencies. They will work with the different retailers, and they will also be linking in with the fuel stockpile that the government holds and providing advice to the government about releasing additional fuel stockpiles there. So they’re effectively a single convening point for fuel supply and forward planning.
Cenatiempo:
Andrew, are we going to start rationing fuel in 12 days as some peak bodies have been told?
Leigh:
Look I certainly don’t expect that Stephen, and that’s based on the fact that our fuel supply is strong. Fuel supply is getting through and the very small disruptions we’ve seen have been replaced by fuel supply from other sources.
What is important is that we have cooler heads prevailing on this, that we are very clear with Australians that while the prices are high, Australia’s fuel supply is good. Just 20 per cent of our oil comes through the Strait of Hormuz. We have a strong link to the international fuel supply system, we have regional coordinators in place working to ensure that we have fuel flowing to Australians who need it.
Cenatiempo:
So what long‑term measures have been put in place to make sure that this never happens again? Because our fuel reserves are far too low. We’re not meeting the 90‑day international standard. What is happening at the moment to make sure that, you know, and I know you can’t click your fingers and fix this overnight, but 12 months, 2 years down the track, are we going to offend ourselves in the same position if something else happens around the world?
Leigh:
Well, there’s less pressure on fossil fuels than there has been in the past. Our grid has now gone to 51 per cent renewables. EVs are doing double digits of new car sales where they were in single digits when we came to office, and the amount of gas which is used in electricity production in the summer when we came to office was twice as high as in the most recent summer.
So that’s taking some of the pressure off the fossil fuel demands. It’s meaning that we are less susceptible to movements in Middle East oil prices, but yes we’re still susceptible to them, and as you said, those flow‑on effects through the trucking and the food sector are very real and they’re going to have an impact…
Cenatiempo:
Okay. So the answer to my question is the government is doing nothing to ensure that we don’t go through this again?
Leigh:
No, the government has been working very, very strongly to decarbonise our economy. That’s in our economic interest, but it also makes us less dependent on fuel price volatility in the Middle East.
Cenatiempo:
Alright. Well, when we speak in 2 weeks’ time, I guess we’ll hope that there is no fuel rationing. Andrew, good to talk to you.
Leigh:
Good to talk Stephen, thank you.
Cenatiempo:
Dr Andrew Leigh – the Assistant Minister for Productivity, Competition, Charities and Treasury and Member for Fenner.