Federal government’s fuel refinery funding slammed
Additional $250m pledge for Australia’s two remaining oil refineries met with harsh criticism by EV and renewable energy groupsA federal government election pledge to provide an additional $250 million of subsidies to Australia’s two remaining oil refineries has been met with strident criticism from EV and renewable energy analysts.
While the actual funds have already been accounted for the government’s mid-year economic update, both the Electric Vehicle Council (EVC) and the Smart Energy Council (SEC) have decried the spend as “propping up the failing oil industry”.
The refinery sector already received a minimum price-based subsidy last year worth an estimated $2 billion.
Prime Minister Scott Morrison, who announced a halving of fuel excise for six months in the federal budget two weeks ago, said on Wednesday that the additional funding is designed to shore up Australia’s independence when it comes to fuel supply.
This claim comes despite the fact Australia’s strategic fuel reserve has been at less than two-thirds the recommended level of 90 days since 2012, with petrol supplies currently standing at 30 days.
Australia’s oil refinery count has halved in the last 12 months, with BP closing its Kwinana plant in Western Australia and ExxonMobil shuttering its Altona facility in Victoria, leaving Ampol and Viva Energy’s plants in Brisbane as the only two active refineries in Australia.
“COVID-19, the Russian war in Ukraine and trade restrictions have disrupted global supply chains, and Australia is not immune,” said Morrison.
“Oil refineries literally fuel a stronger economy, and these investments will help keep our truckies, miners, defence force and farmers moving across Australia.”
The news has been met with derision from the EVC, which questioned the lack of investment in electrification of Australia’s transport network.
“Australia is capable of producing abundant clean electricity and that electricity could be powering our trucks and cars,” said EVC chief executive Behyad Jafari.
“But we have a prime minister who's more interested in subsiding foreign oil and that's tragic."
Jafari said the government should be doing “everything possible” to electrify the transport network, including public transport and commercial infrastructure.
“But instead of moving us toward the future, the Morrison Government is choosing to spend six billion dollars in taxpayer money on propping up the failing oil industry. It's frankly dismaying for everyone who understands where the world is headed,” Jafari said.
The chief executive of the SEC, John Grimes, was also highly critical of the proposal.
“Providing $250 million to address a fuel security crisis is like putting $1 in the tank when you’re running out of petrol,” Grimes said.
“After nine years of inaction from the federal government, Australia is facing a genuine fuel security crisis. If Australia’s supply routes are blocked, we have at most three weeks of supply before we run out of petrol and diesel.
“Australia’s fuel security is an absolute disgrace. We desperately need a national fuel security policy and a national energy policy.”
Related: Australia’s first public hydrogen refuelling station for Geelong
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