Australia’s fuel security framework has been significantly strengthened in the latest Federal Budget, with a focus on stabilising short-term supply while building long-term resilience across the energy system. The response reflects increasing concern around global fuel market volatility in light of recent geopolitical disruptions.
At the centre of the policy is a $14.8 billion package aimed at strengthening Australia’s fuel resilience. This combines immediate supply interventions with broader structural reforms designed to reduce reliance on imported fuels and improve national preparedness.
In the near term, the Government has acted to secure additional fuel volumes, including more than a billion litres for delivery over a four‑month period. Measures such as relaxing stockholding requirements, underwriting cargoes and adjusting fuel standards have been used to increase supply flexibility and enable greater use of domestically produced fuels.
Alongside this, the Fuel and Fertiliser Security Facility is supporting imports of critical supplies, including diesel and jet fuel, to maintain continuity across key industries.
Beyond emergency supply, the Budget signals a shift towards building strategic reserves. The Government is establishing a $3.2 billion Australian Fuel Security Reserve, expected to hold around one billion litres of diesel and jet fuel. Alongside expanded minimum stockholding obligations, this will lift Australia’s diesel and jet fuel coverage to approximately 50 days, strengthening the country’s buffer against future disruptions.
Domestic refining remains a key component of the strategy, with continued support for Australia’s existing refineries and further investigation into expanding local capacity.
This reinforces the role of domestic processing in maintaining energy security, particularly as global supply chains become less predictable.
A more coordinated national approach is also emerging through the introduction of a National Fuel Security Plan. Developed through National Cabinet, this framework
sets out a structured response to supply shocks, supported by a dedicated taskforce to improve coordination between government and industry.
The Budget also includes a range of targeted relief measures for industry. Temporary reductions in fuel excise, the removal of the heavy vehicle road user charge for three months, and access to interest-free loans via the National Reconstruction Fund are designed to support operators facing acute cost pressures. These measures will be
particularly relevant to WA’sWA’s resource and logistics sectors, where fuel is a major operational input.
Importantly, the Government has linked fuel security with broader energy transition objectives. A proposed domestic gas reservation will require exporters to allocate
20 per cent of supply to the local market, supporting greater price stability and energy availability for industry.
At the same time, investment in alternative fuels and technologies is accelerating. Funding for low-carbon liquid fuels, hydrogen projects and cleaner fuel production is
intended to diversify Australia’s energy mix and reduce reliance on imported oil over time. Electrification is also playing a growing role, with continued incentives for electric vehicles and investment in charging infrastructure aimed at gradually shifting transport away from traditional fuels.
Fuel security is increasingly being treated as part of a broader energy equation, one that spans supply chain resilience, domestic capability and the transition to
lower-carbon energy sources.
As these policy settings continue to evolve, industry will play a critical role in ensuring that practical, scalable solutions are delivered across Australia’s energy and
resources sectors.