Friday, November 7, 2014

Road Freight Body Wants Changes to Fuel Retention Regulations

Country is in Default as a Member of IEA
Shipping News Feature

AUSTRALIA – If you can’t beat them – change them, that seems to be the message from the Australian Trucking Association (ATA) which has lodged its own take on the country’s retained fuel stocks in a submission of recommendations to the Government’s Energy Green Paper. The Australian Government provides no capacity and holds no stocks of fuel and therefore all are held by commercial entities, and the road freight representative body is lobbying for changes to the current International Energy Agency (IEA) requirements for the amount retained which are under national control.

As an IEA member Australia is required to hold 90 days of emergency oil stocks in case of a significant oil supply disruption. Australia’s fuel stocks stand at 52 days, which is the lowest of the IEA member countries, the next worst case being Luxembourg which currently holds 89 days’ worth of fuel. The ATA sees the current rules as outdated and Eurocentric and is plainly of the opinion that the case for Australia is vastly different from other countries within the organisation.

The IEA has pointed out both Australia’s steady decline in oil production and how diesel fuel use is becoming more common year on year. The ATA argues that good ocean freight links, 2 to 3 weeks supply always available ‘on the water’ and the changed political situation since the rules were drawn up at the time of an OPEC crisis to provide fuel security, are all grounds for the changes proposed. ATA Chief Executive Stuart St Clair, explained:

“Liquid fuel is an essential part of day-to-day life in Australia. In the event of a disruption to oil supply, the emergency stockpile rules enable governments to keep supply chains running or assist other countries experiencing supply issues. However, the IEA’s 90 day requirement was set in 1974. This figure does not account for developments in the petroleum market since this time, including the holding of stocks at sea. These stocks account for more than a quarter of total oil stockholding directly owned and controlled by Australian companies.

“The Government should press the IEA to review its 90 days stockholding figure to reflect these developments and create a revised oil stockholding requirement. The Government should then seek to comply with the revised requirement. Australia’s fuel companies do an excellent job of providing a reliable fuel supply across our country. However, they can’t be expected to have complete responsibility for maintaining critical fuel supplies in the event of a crisis, such as a major natural disaster.”