budget-09Fuel supply and security

Source: https://budget.gov.au/content/01-fuel-supply-and-security.htm # Fuel supply and security Responding to the global oil shock Print or save page On this page ## Boosting Australia’s fuel security The crisis in the Middle East has disrupted global oil supply. The Government is strengthening Australia’s fuel supply now and into the future through our $14.8 billion Strengthening Australia’s Fuel Resilience Package. ### Securing fuel and fertiliser now The Government has secured more than a billion extra litres of fuel so far for March to June by: - relaxing the Minimum Stockholding Obligation - underwriting additional cargoes, and - adjusting fuel standards, enabling more Australian‑produced fuels to be used here. Fuel and fertiliser shipments are en route to Australia through the new $7.5 billion ($5 billion USD) Fuel and Fertiliser Security Facility. So far, Export Finance Australia has secured over 450 million litres of additional diesel and around 100 million litres of additional jet fuel through this facility. ### Building up reserves for the future - We are expanding the Minimum Stockholding Obligation with an additional 10 days’ supply for diesel, jet fuel and petrol. - We are establishing the $3.2 billion government‑controlled Australian Fuel Security Reserve, which will hold around 1 billion litres of diesel and jet fuel to provide an additional buffer during any future crisis. Together through these efforts, Australia will increase its diesel and jet fuel reserves to 50 days. - We have strengthened the Fuel Security Services Payment to protect the future of our two refineries and committed $10 million for feasibility studies into expanding our domestic refining capacity. - We are also providing $34.7 million to manage Australia’s fuel security framework, including oversight of the Fuel Security Services Payment and the Minimum Stockholding Obligation. ### Ensuring a coordinated national response The Government is facilitating an orderly response to the international supply chain disruptions, coordinating planning across states and territories and strengthening our trading partnerships. The National Fuel Security Plan agreed by National Cabinet establishes a coordinated four‑stage approach to safeguarding Australia’s fuel supply, supported by the Fuel Supply Taskforce. To raise awareness of the National Fuel Security Plan and to help Australians feel prepared and supported, the Government has launched the National Fuel Security Campaign. The campaign encourages Australians to adopt simple, practical behaviours to use less fuel, helping our supply go further and saving fuel for our truckies, farmers and essential services. ### Relieving immediate pressure on fuel users - To keep our trucks, trains and planes moving and critical production online, the Government is helping manufacturing and logistics businesses manage cashflow pressures with interest‑free loans from the National Reconstruction Fund’s (NRF) $1 billion Economic Resilience Program. This complements the $5 billion committed to the NRF’s Net Zero Fund since last Budget. - We have also more than halved the fuel excise and reduced the heavy vehicle road user charge to zero for three months, and deferred full cost recovery arrangements for agricultural export services. - To support supply chain efficiency, the Government will streamline the Australian Competition and Consumer Commission’s (ACCC) powers to allow industry to better coordinate during exceptional circumstances. - The Government has also empowered the Fair Work Commission to make orders to support more timely adjustments to fuel terms in road transport contracts, supporting small business. To support businesses’ and individuals’ purchasing options, the Government has increased reporting on fuel availability and prices through ACCC and Fuel Supply Taskforce reporting. We are also regularly engaging with industry through the Taskforce and other forums to ensure the policy response is timely, well targeted and appropriate. ## Strengthening supply chains Australia’s economy depends on secure and reliable supply chains. In a more volatile global environment, the Government is taking targeted action to keep essential goods moving while strengthening resilience for the future. This approach focuses on early action, close partnership with industry, and interventions that support markets rather than replace them. ### Strengthening partnerships with trading partners Since the conflict in the Middle East began, the Government has facilitated supply of 250,000 tonnes of agricultural urea for Australian farmers and signed landmark supply chain commitments with Japan, the Republic of Korea, Singapore, Malaysia and Brunei Darussalam, keeping critical goods flowing despite global instability. ### Improving freight resilience Moving more freight by rail or ship improves fuel efficiency and supply chain resilience. The Government is providing $55 million for a Transport Resilience and Capacity Kickstart pilot program to incentivise greater volumes of ship and rail freight. We will also progress improvements to interstate rail operations and connectivity, and biosecurity border processes will be streamlined to help get fertiliser to farms, faster. The Government will accelerate heavy vehicle reforms through National Competition Policy to increase heavy vehicle transport productivity and support the uptake of zero emissions heavy vehicles. ## Building resilience The Government is improving Australia’s longer‑term resilience to energy shocks, securing more affordable gas and shielding Australians from the worst impacts of climate change through our transition to net zero. Australians will have more choice in how they power their homes, businesses and vehicles, reducing their dependence on imported fuels and vulnerability to high global energy prices. ### Building energy sovereignty Australia continues to take steps to secure greater energy sovereignty, delivering: - 6.8 gigawatts of renewable energy in 2025, and more than 370,000 home batteries through the Cheaper Home Batteries program since 1 July 2025, providing over 10 gigawatt hours of new capacity. - Over 4 million households currently generate their own solar energy, and two million are expected to have a battery by 2030. The Government is announcing a 20 per cent domestic gas reservation so that LNG exporters supply a proportion of production to the domestic market. The domestic reservation scheme will commence on 1 July 2027, with final consultation on legislation throughout June and July. This will ensure Australian gas users have access to a stable and affordable supply of energy and will grow our energy resilience and industrial capabilities. Alongside implementation of a domestic gas reservation, the Government will streamline gas regulatory frameworks, with the reservation superseding the Australian Domestic Gas Security Mechanism and Heads of Agreements, and enabling further reform to the Gas Market Code. ### Making more clean fuels here Diversifying our energy supply away from imported fuels will improve our economy’s resilience to future oil shocks. - The Government is delivering the $1.1 billion Cleaner Fuels Program to provide production support to the domestic low carbon liquid fuels industry. - We are also progressing the $1 billion Round 2 of the Hydrogen Headstart program to provide revenue support for large‑scale renewable hydrogen projects. - We are continuing to develop a domestic low carbon liquid fuel industry, along with a green fuel bunkering strategy. Working with industry, we will introduce a demand measure that provides certainty for new Australian low carbon liquid fuel production and stimulates investment in new, clean fuel refining capacity. This will reduce our reliance on imported fuels, improving the resilience of our domestic transport industry. ### Electrifying freight and transit - The Government will transition the arrangements to support electric cars to a permanent 25 per cent fringe benefits tax (FBT) discount for eligible electric cars costing over $75,000 from 1 April 2027, and for all eligible electric cars from 1 April 2029. - Electric cars costing up to $75,000 will continue to receive a full FBT exemption, provided the arrangement commences before 1 April 2029. Existing arrangements will not be affected. - All eligible cars will retain the FBT discount in place when the fringe benefit arrangement starts, for the life of the arrangement. These changes reflect the recommendations of the statutory review of the electric car discount policy and will further incentivise the supply of more affordable electric cars, while moving to more sustainable settings for the future. We are supporting Australia Post to electrify its delivery fleet with a further $40.5 million investment. This adds to work underway to make it easier for Australians to charge their electric vehicles by committing $40 million to install more kerbside and regional chargers. ## Budget themes Fuel supply and security [Cost of living](02-cost-of-living.htm) [Productivity](03-productivity.htm) [Tax reform](04-tax-reform.htm) [Care and opportunity](05-care-and-opportunity.htm) [Security and investment](06-security-and-investment.htm) [Back to top](#masthead-top)