The West Australian government will establish its own fuel reserves, starting with the purchase of four million litres of diesel for $10 million as the global shock driven by the Israel-US conflict in Iran continues to bite mining and agriculture sectors.
The fuel was purchased by Cambridge Gulf Limited from BP and sold to the WA government. It will be delivered by BP in the coming weeks to Cambridge Gulf’s facility in Wyndham, where it will be stored free of charge.
The WA government estimates the state consumes about 25 per cent of the country’s diesel, and while four million litres is a small fraction of what the state uses, Premier Roger Cook said it would be delivered to places experiencing localised shortages.
“That means it can be directed to where it is needed most … to really target acute, localised shortages,” he said.
“But, in particular, it will support our remote communities and key industries such as agriculture, which rely heavily on uncontracted fuel volumes.”
The total cost of the delivery is about $2.50 per litre.
Both Cook and Energy Minister Amber-Jade Sanderson denied the move to establish a state-based fuel reserve was because the federal system, known as the minimum stockholding obligation, wasn’t working for Western Australia.
“We are the largest single jurisdiction in the world. We have specific needs, which is why we need to have our own stockpile and to make sure that that is pre-positioned in strategic parts of the state,” Sanderson said.
“What [this announcement] suggests is that there are very regional, remote and vulnerable areas of the state that it’s difficult to get fuel to.
“Ultimately, that’s what we will ensure occurs in future MSO releases, but that also relies on the federal government to make a determination.
“We want to take our future into our own hands. Whilst we’ll work with the federal government, we want to ensure that we’re looking after our industries first.”
Sanderson said the fuel would be cost-neutral to the taxpayer because it would be cost-neutral to the taxpayer, because it’ll be sold at market rates.
The idea had broad support from the opposition but both the Liberals and Nationals described it as too late.
WA Nationals leader Shane Love said four million litres won’t touch the sides.
“It is woefully inadequate,” he said.
“The WA agricultural sector alone is already more than 10 million litres short of diesel, and that’s before you factor in remote communities and essential services.
“At best, this supply will last less than four days.”
Opposition Leader Basil Zempilas said he supported anything that helped West Australians, and in particular regional areas, get through the immediate danger and the short-term fuel shortages.
WA Parliament will reconvene for around two hours on Tuesday, in the middle of a six-week break, to ratify the state government’s rules on fuel importers to provide them with details of their sales and supply of fuel.
The rules will be debated in the lower house, which will be followed by question time, while in the upper house, the rules will need only to be tabled.
The Greens will move a motion to debate the government’s response to the fuel crisis which will probably fail without support from the Liberals or Labor but will give them time to fire salvos toward the government.
Greens MLC Sophie McNeill said the state would have spent tens of thousands of dollars to reconvene parliament so the least they could do was engage in valuable debate.
“It’s costing taxpayers tens of thousands of dollars for the upper house to be recalled as well for these orders to be tabled, but the government is refusing to allow us to debate this fuel crisis, and we find that completely unacceptable,” she said.
Hamish Hastie is WAtoday’s state political reporter and the winner of five WA Media Awards, including the 2023 Beck Prize for best political journalism.Connect via X or email.
