Australia promises $ 2.3 billion to maintain oil refining locally in geopolitical turmoil

The remaining two Australian oil refineries will receive $ 2.3 billion in taxpayer funds to keep them open and put downward pressure on Australia’s fuel costs. It is also due to Australia’s efforts to enhance fuel safety following the closure of two oil refineries and the growing geopolitical instability of the region.

The funds will be distributed to Ampol in Brisbane and Viva Energy in Geelong. Infrastructure and facility upgrades will also cost approximately $ 302 million.

Prime Minister Scott Morrison described this measure as another step in ensuring Australia’s economic and national security.

“This is an important plan in our plan to secure Australia’s recovery from the pandemic and prepare for a future crisis,” Morrison told reporters Monday.

“Strengthening our fuel security means protecting 1,250 jobs, giving certainty to key industries and strengthening our national security,” he added. ..

Daniel Walton, National Secretary of the Australian Trade Union, praised the decision and wrote: On twitter“Great news for fuel refineries, America’s most important asset.”

Epoch Times Photo
Workers at a closed kernel refinery in Sydney, Australia, March 22, 2005 (Ian Waldie / Getty Images)

“Without the ability to produce critical fuel, we couldn’t afford to be a country. [while] I hope the route remains open. “

The Federal Automobile Industry Council (FCAI) hoped that this package would improve Australia’s fuel quality.

FCAI CEO Tony Weber said, “Australia’s fuel standards are lower than in regions such as Europe and Asia, allowing some car companies to bring the world’s most fuel-efficient and environmentally friendly technologies to the Australian market. I haven’t. ” ..

“We now have a great opportunity to coordinate Australia’s fuel quality with the rest of the world, encourage the provision of the latest engine technology and take further steps to reduce CO2 emissions,” he said. Said In the statement..

Australia currently has approximately 68 days of crude oil reserves, below the 90-day standard set by the International Energy Agency.

In addition, economic factors have reduced Australia’s domestic production over the past decade, especially in recent months accelerated by the start of the blockade of COVID-19, making Australia dependent on foreign producers, especially in Asia. I have been forced to do so.

“Domestic oil production is currently not enough to meet Australia’s aggregate demand for fuel, even if everything is refined domestically,” said Hunter Laidlaw. Library of Congress..

“Existing Australian refineries are relatively small and old and must compete with the larger and more efficient refineries in Asia.”

In October, BP closed the Kwinana refinery due to oversupply in the region and low margins for plant closures.

In February, ExxonMobil closed its Altona facility in Victoria because it was not economically viable and instead converted the facility to an import terminal.

View of Mobile Oil Refinery
ExxonMobil Oil Refinery in Altona, Melbourne, Australia, June 27, 2008. (MickTsikas / Reuters)

Further closures will make Australia completely dependent on fuel imports. However, such a situation will leave the country vulnerable if the overseas supply chain is disrupted.

“Current turmoil, including geopolitical instability and the potential risk of conflict in the Indo-Pacific region involving China and the United States, is the world’s energy supply chain, including the coveted fuel imports. Increases the risk of interruptions. According to Alexei Muraviev, Dean of the Faculty of Social Sciences and Security at Curtin University, from an overseas processing facility to Australia.

“Why is fuel important to us? Obviously, fuel powers everything. Without fuel, there are no trucks to deliver goods. Trains are not running. Four-wheeled vehicles, trucks. , Tanks, military aircraft, civilian aircraft, warships, and other military hardware are not in operation. The country is at a standstill, “he told the era.

“This ($ 2.3 billion) gives us a little break in the worst-case scenario if we can’t receive supplies from abroad,” he added. “The global supply chain was established on the premise that there would be no disruption to the international security environment. This premise may have returned to the 90s, but now in the 20 years of the 21st century, more. There is great strategic competition. “

Currently in Australia Largest import market Singapore and South Korea, followed by India and China. These markets are also heavily dependent on the Middle East for crude oil and are vulnerable to tensions in the region.

Meanwhile, China’s share of Australia’s fuel supply increased from just 0.5% in 2010 to more than 13% in 2019-2020. In 2020, Beijing launched an economic coercion campaign against Australia targeting major exports to Australia.

This move has created a demand for Australian industry to diversify its trade relations away from the influence of the Chinese administration.

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