Fuel Security: Fuel Industry Operations Group

Global supply chains have recalibrated in recent weeks, and fuel companies are confident of supply for June, July, and early August.

A spike in local demand is expected in late June and early July due to school holidays and the agricultural sector preparing for harvest later in the year. Fuel stocks in Western Australia remain above average and plans are in place to accommodate this extra demand.

Fuel station stockouts remain low, and there are no reported shortages from the agricultural and resources sectors.

Fuel companies report the fuel supply outlook for June, and early July remains positive.

FuelWatch now includes almost all WA fuel outlets. From 1 May, retailers must report when they run out of fuel as well as prices. Since late March, over 1500 inspections have identified 82 breaches of the rules.

An increase in fuel demand is expected after June seeding. The State Fuel Controller will work with industry and suppliers to maintain reliable supply and distribution.

The fuel distribution network has stabilised and no major shortages are being reported to the State Fuel Security Controller.

The first Strategic Stockpile fuel shipment arrived in Wyndham this week. More deliveries are coming soon to ensure fuel is available in Geraldton, Kwinana, Kalgoorlie and Esperance to assist with future demand spikes in regional areas.

Fuel companies are confident of fuel deliveries for May and June. Fuel stock levels have returned to normal levels at major terminals in WA.

Planning continues for potential major fuel supply disruptions and an escalation under the National Fuel Security Plan. 

The State Controller reported that fuel supplies to key distributors have returned to normal levels, and key regions are no longer reporting fuel shortages. 

Fuel companies continue to remain confident that fuel shipments for May will arrive as planned. There is growing confidence about supply for June.

Starting last week, it is now mandatory to report stockouts to Fuelwatch. The boundaries for Fuelwatch have also been expanded with an additional 203 regional and remote fuel stations added to Fuelwatch. 

Planning continues for potential major fuel supply disruptions and an escalation under the National Fuel Security Plan.

The State has purchased 4 million litres of diesel to be used to ease acute shortages. The fuel will be stored in the Kimberley. The option for future fuel purchases is now being considered.

The State Controller advised that the majority of regions are now reporting normal fuel availability. This is due to the collaborative efforts of the fuel suppliers and distributors working together with the State on addressing fuel challenges over the past several weeks. 

Fuel suppliers are confident about planned deliveries in May, with growing confidence in June. 

The State is continuing preparations for escalation to Level 3 and 4 of the National Fuel Security Plan - National Fuel Security Plan | PM&C.

The State Controller reported that disruption to fuel supply over the Easter weekend was minimised due to the efforts of fuel companies and distributors working closely with the State Government.

Fuel companies continue to remain confident that fuel shipments for April will arrive as planned. There is growing confidence about supply for May.

Industry peak bodies reported concerns are easing from members about April fuel deliveries - however further work is required to ensure timely information is flowing to the agricultural sector. 

The WA Government has adopted the National Fuel Security Plan agreed to at National Cabinet. Details of the plan can be found here: National Fuel Security Plan | PM&C

Currently, all states and territories, including WA, sit at Level 2 on the National Plan. This means precautionary measures are being taken to shore up fuel supply and encourage Western Australians to only buy the fuel they need.

Any shift in level of the National Plan will be signalled by the National Cabinet in consultation with industry and other sectors.

The State Controller advised that over the weekend, Atlas Fuels agreed to provide up to 5 million litres to distributors and locations struggling to access fuel.  Delivery is currently underway.  Increases in fuel availability to key regional distributors is continuing from other fuel companies. 

Fuel companies are confident April fuel shipments remain on track, and they will be able to provide all contracted volumes to their distributors. National stockpile (MSO) volumes will continue to be distributed in additional to general supply.

Suppliers and distributors committed to sensible measures to avoid end user customers lifting significantly above their usual or contracted volumes.

With some national stockpile (MSO) volumes now flowing in Western Australia, the State Controller advised that an emerging supply chain bottleneck is the availability of transport. The State Controller is working with fuel companies and distributors on transport options, including expanding rail capacity on the Kalgoorlie and Esperance lines.

The Government is continuing its planning and preparation for potential escalation.

Key actions

• The Government will monitor the impact of Cyclone Narelle on fuel shipments and keep the FIOG informed.
• Department of Transport will investigate whether lime and lime-sand can be added to the uplifted transport allowances for fuel and fertiliser.
• The State Controller will work with fuel companies and distributors to identify the fastest way to transport MSO volumes to areas of critical need.

The primary focus of the FIOG and the State Controller remains on getting fuel to areas of acute need in the regions, with the focus on the Goldfields, Great Southern, Mid-West and South-West. Additional volumes are now flowing to major fuel distributors. 

The State and Commonwealth are advancing plans for escalation, if required. 

On the weekend, the Commonwealth Minister for Energy stated that six out of eighty-one scheduled shipments to Australia had been delayed or cancelled. None of those six were destined for Western Australia. 

The National Energy Ministers met today and will continue to meet weekly. Across Australia more than 100% of usual volumes of fuel are flowing. This indicates that MSO volumes are being distributed.

The Commonwealth remains confident in international fuel supplies.

The State Government has appointed a Fuel Security State Controller to work with the new State Management Team. The State Controller will work closely with Federal Fuel Supply Coordinator who was appointed this week.

The State Controller has already engaged fuel distributers operating across key regions to get greater clarity on how to best resolve bottlenecks and localised supply pressures.

The Minimum Stock Obligation (MSO) legislative instrument has been finalised and published. Fuel companies advised that their MSO release plans have now been approved by the Commonwealth. ACCC authorisation is pending.

In anticipation of ACCC approval, fuel companies have contacted distributors to determine their availability to transport MSO fuel to key regional areas. Distributors are reporting that trucking capacity is not a constraint.

National Cabinet is meeting tomorrow. There is a National Energy Minister's meeting on Friday. The FIOG will meet again on 20 March. 

DEED is finalising the prioritisation triage process by close of business in consultation with FIOG members.

Fuel companies are working with the State and Commonwealth to finalise authorisations required for the release of Minimum Supply Obligation (MSO) volumes. Authorisation is expected in the coming days. 

The FIOG has identified key freight and logistic bottlenecks and opportunities that will inform plans for the distribution of the MSO volumes when available. 

DEED provided an update on recent action taken by the Federal Government to relax the Minimum Stock Obligation rules, which will allow the release of up to 762 million litres of petrol and diesel from Australia’s domestic reserves. The release is intended to ease fuel constraints in regional areas.

DEED has established a dedicated team that will gather intelligence to assist with triaging the distribution of fuel supplies. They will work closely with WA fuel companies to ensure fuel gets to where it is needed.

The Department of Transport provided an update on measures that will be taken to allow an uplift on road freight tonnage. This will allow trucks to carry extra fuel and fertilisers to the regions. Work continues on improving rail freight efficiency on the Kalgoorlie line. 

The Premier and the Prime Minister had a conversation about ongoing domestic fuel supply, logistics challenges, and the need to ensure adequate volumes are getting where they are needed in Western Australia.  

Key Actions

• The Government will progress the triage process in consultation with the FIOG
• The Government will implement efficiency measures to allow B-double road trains to carry heavier loads
• FIOG members and industry peak bodies to provide specific intelligence to DEED to assist with the triage process

Representatives reaffirmed their commitment to working collaboratively to ensure the security of WA’s fuel supply.

DEED provided an update on recent action taken by the Federal Government to make available an additional 100 million litres of higher-sulphur fuel per week for two months.

DEED also provided information on potential the WA Hazard Management Plan and emergency measures, should they be required.

The Department of Transport provided an update on Port prioritisation and fuel shipment arrivals, all shipments expected to arrive, up to seven shipments are expected in the next 7 days.

Government, unions and fuel transport companies are meeting today to identify bottlenecks and agree where triple road trains can be safely used to deliver fuel to the regions.

It was agreed that Kalgoorlie, Great Southern, Wheatbelt and South West should be the initial focus of the FIOG.

Key Actions

• The Government will seek urgent information from the Federal Government on the 100 million litres of higher-sulphur fuel
• The Coordinator of Energy will engage with key fuel suppliers on pragmatic steps to ease fuel distribution system constraints in priority regional areas
• DoT will investigate rail freight efficiences to assist with fuel delivery to Kalgoorlie

Representatives agreed to continue to work cooperatively to keep WA's fuel supply secure.