Australia

Australia in talks with US to address low fuel reserves

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The Morrison government is negotiating with the United States to buy oil to boost Australia's dwindling fuel reserves but Labor says that's not good enough.

Drawing on America's emergency fuel reserves isn't the same as having actual fuel security in Australia, the opposition has declared.

The Morrison government is negotiating with the Trump administration to access millions of barrels of oil from America's own fuel reserve, as Australia hunts for a way to boost dangerously low levels of fuel held on domestic soil.

But Labor says Australia needs a strategy that gives fuel security onshore.

Australia has enough petrol and crude oil to last 28 days, well below the 90 days mandated by an international agreement.

Energy Minister Angus Taylor says Australia now is in discussions with the US about tapping into its strategic petroleum reserve.

"The government has undertaken a second initiative since the election to ensure that we continue to deliver increased security for Australians," he said in a statement on Monday.

"Access through a contractual arrangement would greatly boost our stocks and flexibility of supply."

Mr Taylor has not outlined how much such a deal would cost, merely saying it would be "effective but also efficient" for taxpayers.

It would take between 20 and 40 days for oil reserves to be sent to Australia from the US, the minister told ABC radio.

Scott Morrison with Energy Minister Angus Taylor.
Energy Minister Angus Taylor (AAP)
AAP

Opposition Leader Anthony Albanese says that's not good enough.

"I'll tell you what would shore up Australia's fuel security, and that's to actually have fuel security here in Australia," he told reporters in Sydney.

"So a strategy here, not a strategy that says if we run out the US will send us some in support."

Independent MP Andrew Wilkie said it was disingenuous of the government to spruik this as a solution.

"The government is cooking the books. The only way in which our fuel reserves will be boosted is on a balance sheet," he said in a statement.

"It also relies on the goodwill of the US, but Donald Trump can't be trusted to honour agreements at the best of times, particularly if there was a global shock and we actually needed to access this oil."

Asked if the plan was a fiscal fudge, Prime Minister Scott Morrison told reporters: "No, it isn't."

So-called exchange deals allow countries to boost immediate fuel levels in return for giving the same amount of higher quality oil back to the US.

But Mr Taylor also wants the International Energy Agency treaty, which sets the 90-day supply agreement, to be rewritten to take into account oil in transit to Australia.

If oil on its way to Australia was counted, the country would have 92 days in stock, he said.

Mr Wilkie labelled that rationale "bizarre".

"It's patently obvious that you can't count any oil as on-hand until it's landed safely in Australia," he said.

The government is yet to release the final findings of a review of Australia's fuel security, launched in May last year.

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