Fuel Security (Consequential and Transitional Provisions) Act 2021

The Act does not define its own major concepts from scratch. Instead it repeatedly cross‑references definitions in the Fuel Security Act 2021. The main concepts that appear in the consequential amendments and transitional provisions are:

• Minimum stockholding obligation (MSO): referred to in items 5, 9, 10, 13A, 13B, 13C, and 13D of Schedule 1. These provisions concern reporting and auditing of regulated entities’ compliance with the MSO under s 7 of the principal Act. “MSO product”, “MSO activity” and “regulated entity” each have the meaning given by the principal Act. The transitional provisions in Schedule 2 confirm that the “obligation day” from which the MSO starts must not be before 1 July 2022, and that s 30 of the principal Act (likely a compliance or reporting provision) applies to regulated entities after 30 June 2022.
• Fuel security services payment (FSSP): items 10 and 13A of Schedule 1 refer to fuel security services payment and to “FSSP fuels”. The transitional provisions at item 3 of Schedule 2 block applications for the payment until the relevant rules under s 39(3) of the principal Act are made. The Minister may still have regard to consultations undertaken before the principal Act commenced when determining the payment (s 44 of the principal Act).
• Holding stock: the definition of holding stock in s 5 of the Petroleum and Other Fuels Reporting Act 2017 is expanded by a new subsection (4) deeming that a person is taken to be holding stock of a covered product that is an MSO product if the person holds stocks within the meaning of s 19 of the Fuel Security Act 2021. This alignment ensures that reporting obligations under the Petroleum and Other Fuels Reporting Act cover the same stocks that count for the MSO.
• Affected person audit: a new concept introduced for compliance audits under s 13C(2) of the Petroleum and Other Fuels Reporting Act. An “affected” person includes the person being audited, the regulated entity, its Australian controlling corporation (if any), any entity in possession of MSO stocks held by the regulated entity, and the constitutional corporation if the audit relates to FSSP fuel refining.
• Protected information: the definition in s 5 of the Petroleum and Other Fuels Reporting Act is extended to include information obtained under the Fuel Security Act 2021, so that confidentiality protections apply across both regulatory regimes.
• Entrusted persons: s 21 of the Petroleum and Other Fuels Reporting Act is extended by a note that the powers, functions and duties of entrusted persons are not limited to those conferred by that Act; they also encompass those under the Fuel Security Act 2021.
• Civil penalty provisions: the Act creates new civil penalty provisions (Pt 2 of the Petroleum and Other Fuels Reporting Act) for false or misleading information relating to the Fuel Security Act 2021 (s 13A, 300 penalty units) and for failing to provide facilities and assistance for an audit (s 13C, 250 penalty units) or failing to comply with audit report requirements (s 13D, 250 penalty units). These are standalone civil penalties, not criminal offences, but they carry substantial financial consequences.

The Act also uses the concept of “rules” made under s 84 of the principal Act. These rules are the delegated legislation that will flesh out the detail of compliance audits, the timing of the obligation day, and the application process for the fuel security services payment. The transitional provisions explicitly state that the rules must not prescribe an obligation day before 1 July 2022, and that they may prescribe a period commencing before the principal Act commences for the purposes of s 10(1)(b) of the principal Act.

The direct effect of this Act falls on a defined set of commercial entities and persons involved in the Australian fuel supply chain:

• Regulated entities: These are the entities subject to the minimum stockholding obligation under the Fuel Security Act 2021. They are likely refiners, importers and major fuel distributors that are required to hold mandated volumes of MSO products. Under the new s 13A of the Petroleum and Other Fuels Reporting Act, any report they give under s 11 of that Act that relates to MSO compliance or fuel security services payment must not contain false or misleading information, and they face a civil penalty of 300 penalty units if they do.
• Australian controlling corporations: If a regulated entity has an Australian controlling corporation, that corporation can be an “affected” person in a compliance audit (s 13C(2)(b)(ii) of the Petroleum and Other Fuels Reporting Act). This means the controlling corporation may be required to provide facilities and assistance for audits, and can be penalised for failing to do so.
• Entities in possession of MSO stocks: Any entity that physically holds stocks of an MSO product that are held within the meaning of s 19 of the Fuel Security Act 2021 (including third‑party storage providers) is also an “affected” person in an audit. They may be required to cooperate with audit team leaders and provide reasonable facilities and assistance.
• Constitutional corporations that refine FSSP fuels: The audit and reporting provisions also extend to corporations that refine fuels eligible for the fuel security services payment. They may be required to undergo compliance audits under rules made for the purposes of s 13B(1) of the Petroleum and Other Fuels Reporting Act.
• Entrusted persons: Officers of the Commonwealth who are entrusted with information under the Petroleum and Other Fuels Reporting Act are now also entrusted with functions under the Fuel Security Act 2021. Their powers, functions and duties are not limited to the former Act. This affects the internal administrative arrangements of the Department administering the fuel security scheme.
• Persons claiming the fuel security services payment: The transitional provisions prevent any application for payment under s 39 of the principal Act until the relevant rules are made. This affects constitutional corporations that might have expected to apply immediately upon the principal Act’s commencement. The Minister may still consider pre‑commencement consultations, which slightly widens the evidentiary base for payment determinations.

The Act also indirectly affects any person submitting fuel information under the Petroleum and Other Fuels Reporting Act because the definition of “fuel information” is expanded to include the holding of stocks of MSO products. Reporting entities that were not previously required to report on MSO stocks now face an expanded reporting obligation from 1 July 2022 (transitional provision item 19(4)).

The amendments to the Competition and Consumer Act 2010 and the Taxation Administration Act 1953 affect persons who handle confidential information under those Acts, by extending disclosure authorisations to cover the Fuel Security Act 2021. This mostly benefits the agencies and officers who need to share information between the fuel security regulator and other regulatory bodies.

Overall, the main burden falls on regulated entities, their corporate parents, and storage providers. They must now comply with audit requirements and increased reporting accuracy obligations, with the new civil penalties creating a direct financial risk for non‑compliance. Smaller players in the supply chain that are not regulated entities are largely unaffected, unless they happen to be in possession of MSO stocks held by a regulated entity.

The Act creates several new duties, primarily through its insertion of new provisions into the Petroleum and Other Fuels Reporting Act 2017. It also confers new information‑sharing rights on government agencies.

Duties under the Petroleum and Other Fuels Reporting Act

The most concrete duty is contained in new s 13C(1): a person affected by a compliance audit must provide the audit team leader and any assistants “with all reasonable facilities and assistance necessary for the effective exercise of the audit team leader’s duties in relation to the audit”. This is a broad, open‑ended duty. The Act does not define “reasonable facilities and assistance” - that will depend on the nature of the audit and the person’s role. A regulated entity likely must provide access to premises, records, data systems and staff. A third‑party storage provider that holds MSO stocks must also cooperate.

The duty is backed by a civil penalty of 250 penalty units, so it is not optional. Failure to comply can result in a penalty without proof of intention - the provision is a civil penalty provision, not a criminal offence, but the penalty is substantial (at current rates, about $82,500).

New s 13D imposes two further duties: first, a person required to give a s 11 report must comply with any audit‑reporting rules made under s 13B(1); second, a person required by those rules to give an audit report to the Secretary must do so in accordance with the rules. Both carry civil penalties of 250 penalty units.

New s 13A creates a duty not to provide false or misleading information in a report under s 11 when that information relates to MSO compliance or the fuel security services payment. The duty extends to omissions that make information misleading. The civil penalty is 300 penalty units (around $99,000). This duty is more specific than the general false‑information offences in other legislation because it targets reports that feed directly into the fuel security regime.

Duties under the transitional provisions

The transitional provisions impose timing constraints. Regulated entities cannot be subject to the MSO before 1 July 2022 (item 2(1) of Schedule 2). But the rules may prescribe a period that begins before the principal Act commences for the purposes of s 10(1)(b) of the principal Act (item 2(2)). This means entities may have to treat some pre‑commencement period as relevant for compliance, creating retrospective record‑keeping obligations. The Act does not immunise them from that.

Rights

The Act does not create many rights for regulated entities. The main right is to have the obligation day not set before 1 July 2022, giving a clear lead‑in period. There is also a de facto right that the fuel security services payment cannot be applied for until rules are in place, which provides certainty that no applications can be made in a regulatory vacuum.

The amendments to the Competition and Consumer Act 2010 and the Taxation Administration Act 1953 extend the rights of agencies to disclose information that was previously protected. Those are rights for the government, not for private entities.

No private right of action

The civil penalty provisions are enforceable by the Commonwealth (through the Secretary), not by private parties. A regulated entity cannot sue a competitor for giving false information; the duty runs to the regulator. This limits the practical leverage of market participants.

The Act introduces three new civil penalty provisions, all inserted into the Petroleum and Other Fuels Reporting Act 2017, and all linked to the Fuel Security Act 2021. There are no criminal offences created by this Act; the penalties are civil only.

False or misleading information - 300 penalty units

New s 13A of the Petroleum and Other Fuels Reporting Act makes it a civil penalty to provide information in a s 11 report that is false or misleading in a material particular, or that omits something without which the information is misleading, when the information relates to either (a) whether a regulated entity is complying with the MSO under s 7 of the Fuel Security Act 2021, or (b) whether a fuel security services payment is payable to a constitutional corporation. The penalty is 300 penalty units. At the time of enactment (2021), a penalty unit was $210, so the maximum penalty was $63,000; in 2024 it is $313 per unit, making it $93,900. The provision does not require proof that the person knew the information was false - strict liability may apply given it is a civil penalty provision (the Regulatory Powers Act framework applies). This means inadvertent errors in reports that touch on MSO compliance or payment eligibility could attract liability.

Failure to provide facilities and assistance for audit - 250 penalty units

New s 13C(1) imposes a civil penalty of 250 penalty units on a person “affected by an audit” who fails to provide reasonable facilities and assistance to the audit team leader. The class of affected persons is broad, including the auditee, the regulated entity, its Australian controlling corporation, any entity in possession of MSO stocks held by the regulated entity, and any constitutional corporation refining FSSP fuels. The penalty is high - at 2024 unit values, about $78,250. The duty’s open‑ended language (“reasonable facilities and assistance”) could expose a person to litigation over what is “reasonable”. An auditor could demand access to systems that the person considers commercially sensitive; refusing could trigger a penalty.

Failure to comply with audit report rules - 250 penalty units

New s 13D contains two separate civil penalty provisions, each for 250 penalty units. The first targets a person who is required to give a s 11 report and fails to comply with rules requiring an audit report to accompany that report. The second targets a person who is required by rules to give an audit report to the Secretary but does not do so in accordance with the rules.

Enforcement mechanism

The Act applies Part 2 of the Regulatory Powers (Standard Provisions) Act 2014 (the Regulatory Powers Act) to these civil penalty provisions. Item 14 of Schedule 1 inserts new s 33(1A) into the Petroleum and Other Fuels Reporting Act, which declares that for the purposes of Part 2 of the Regulatory Powers Act, the civil penalty provisions of the Fuel Security Act 2021 and the Fuel Quality Standards Act 2000 are “related provisions” to the information‑gathering provisions. This means the enforcement powers (monitoring, investigation, infringement notices, enforceable undertakings, injunctions) available under the Regulatory Powers Act can be used in respect of these new civil penalties. The Secretary will have the power to issue infringement notices (on‑the‑spot fines) for suspected contraventions, avoiding the need for court proceedings in many cases.

No criminal penalties

Notably, the Act does not criminalise any conduct. False or misleading information is civil only, not criminal. This is a deliberate policy choice, possibly to lower the evidentiary burden for enforcement. However, civil penalties can still be severe, and the Regulator can seek pecuniary penalties through the Federal Court.

The Act is entirely about interaction with other laws because it is a consequential amendments Act. It modifies four existing Commonwealth Acts to align them with the new Fuel Security Act 2021.

Competition and Consumer Act 2010 (Cth)

Section 95ZPA(1) of the CCA contains a secrecy provision that limits disclosure of information given in connection with certain reviews and inquiries. The amendment adds “or the Fuel Security Act 2021” to the list of Acts for which a disclosure can be authorised. This means that a person who obtains information under the CCA’s review mechanisms can also share it for purposes connected with the fuel security regime, provided the disclosure is authorised under that Act. The application provision (item 19(1)) clarifies that the amendment applies to disclosures made after commencement, regardless of when the information was obtained.

Fuel Quality Standards Act 2000 (Cth)

Section 67A of that Act lists Acts that are “fuel‑related financial assistance or fuel‑related scheme Acts” for information‑sharing purposes. The amendment inserts the Fuel Security Act 2021 into that list (new sub‑paragraph 67A(b)(iia)). This means that information protected under the Fuel Quality Standards Act can be disclosed to a person or body exercising powers under the Fuel Security Act 2021. The application provision (item 19(2)) applies to disclosures and authorisations made after commencement.

Petroleum and Other Fuels Reporting Act 2017 (Cth)

This Act receives the most substantial changes. The Act’s object (s 3) is extended to include supporting the implementation of the Fuel Security Act 2021. The definitions of “fuel information” and “holding stock” are expanded to cover MSO products. The definition of “protected information” now includes information obtained under the Fuel Security Act 2021. Most importantly, new civil penalty provisions and audit provisions are inserted, creating a parallel compliance framework specifically for MSO and FSSP matters.

The interaction is two‑way: reporting under the Petroleum and Other Fuels Reporting Act is now the primary mechanism for monitoring MSO compliance. The Fuel Security Act 2021 may create its own reporting obligations, but the consequential amendments ensure that the existing reporting infrastructure can be used, reducing duplication.

Section 21 of the Petroleum and Other Fuels Reporting Act (duties of entrusted persons) is extended by a note that their powers are not limited to that Act. Section 31(1) (dealing with disclosure of protected information) is amended to include the Fuel Security Act 2021 as an Act to which information can be disclosed. Section 33 (monitoring powers) is amended to treat Fuel Security Act 2021 civil penalty provisions as related provisions, enabling the use of the Regulatory Powers Act.

Taxation Administration Act 1953 (Cth)

Schedule 1, s 355‑65(8) of that Act contains a table of exceptions to the tax‑secrecy provisions. Item 6A in the table previously allowed disclosure for purposes of “a fuel‑related financial assistance or fuel‑related scheme Act” as defined in the Fuel Quality Standards Act. The amendment adds “or the Fuel Security Act 2021” to the cell at that item. This means that tax information can be disclosed to the regulator of the fuel security scheme. The application provision (item 19(3)) applies to records and disclosures made after commencement.

Federal Circuit and Family Court of Australia Act 2021 (Cth)

The amendments in Part 2 of Schedule 1 are purely mechanical: every reference in the Fuel Security Act 2021 to the former “Federal Circuit Court of Australia” is replaced with “Federal Circuit and Family Court of Australia (Division 2)”. This is a consequence of the merger of the Federal Circuit Court and the Family Court. It does not change jurisdiction but ensures the Fuel Security Act 2021 refers to the correct court.

Overall interaction

The Act does not override or repeal any existing law, except to replace court names. It expands the scope of information‑sharing and enforcement powers across several Acts, creating a web of cross‑permissions. This reduces the risk that the fuel security regulator will be hamstrung by secrecy provisions in other Acts. It also ensures that the reporting regime under the Petroleum and Other Fuels Reporting Act can serve the new MSO obligations without creating two separate reporting streams.

This Act is itself the amending instrument. It was enacted as Act No. 66 of 2021, assented to on 29 June 2021. It came into force in stages: sections 1 to 3 on Royal Assent; Schedule 1 Part 1 on 30 June 2021 (the commencement of the Fuel Security Act 2021); Schedule 1 Part 2 on 1 September 2021 (the later of the commencement of the Federal Circuit and Family Court of Australia Act 2021 and the Fuel Security Act 2021); and Schedule 2 on 30 June 2021.

The Act has not been amended since its enactment. The commencement table in s 2 notes that any later amendments to this Act will not be reflected in that table.

The Act’s primary function was to amend other Acts. Accordingly, the relevant amendment history for practitioners is the history of the host Acts: the Competition and Consumer Act 2010, the Fuel Quality Standards Act 2000, the Petroleum and Other Fuels Reporting Act 2017, and the Taxation Administration Act 1953 all have their own amendment histories, and these amendments, once made, form part of those Acts as if inserted at the commencement dates shown.

The transitional provisions in Schedule 2 have a limited lifespan. They were designed to bridge the period from the principal Act’s commencement (30 June 2021) to the point at which the substantive regime was fully operational (obligation day no earlier than 1 July 2022). Once the rules under s 84 of the principal Act were made and the obligation day passed, many of the transitional provisions spent their force. However, transitional items 2(3) (s 30 applies after 30 June 2022) and 2(4) (information handling) may still have ongoing effect.

The source text of the Act does not contain any information about litigation. There are no references to court cases, judgments, or judicial consideration of the Act or its provisions. The Act was enacted in 2021 and, as a purely procedural and transitional instrument, it has not been the subject of reported litigation. It is possible that the Fuel Security Act 2021 has been litigated, but that is beyond the scope of this deep dive because the source does not mention any cases.

Practitioners should be aware that the new civil penalty provisions (s 13A, 13C, 13D of the Petroleum and Other Fuels Reporting Act) have not yet been judicially considered. There is no case law interpreting what “reasonable facilities and assistance” means, or what constitutes a “material particular” for false information. Until a case arises, the regulator’s interpretation will be the only guide, and regulated entities must operate in a degree of uncertainty.

The Federal Circuit and Family Court of Australia references are updated, but no litigation under the Fuel Security Act 2021 has apparently reached that court yet, or at least not in a way that has been captured in the public record.

It is also worth noting that the Act does not confer any right to judicial review of audit decisions or penalty decisions beyond the general administrative law remedies. The Regulatory Powers Act provides for merits review of infringement notices in some circumstances, but that is not directly addressed in this Act.

Several provisions in this Act could catch practitioners off guard:

1. The broad “affected person” sweep: A person can be “affected by an audit” without being the regulated entity. An entity that merely holds stocks on behalf of a regulated entity (a storage provider) is captured. It may not have agreed to be audited, nor have any contractual arrangement with the regulator. Yet it must provide “all reasonable facilities and assistance” or face a $78,000 penalty. There is no exemption for small businesses or for entities that are not fuel companies.

2. Retrospective periods: Item 2(2) of Schedule 2 allows the rules to prescribe a period “commencing before the Act commences” for the purposes of s 10(1)(b) of the principal Act. This means that a regulated entity could be required to provide information about stocks held before the principal Act was even enacted. While the obligation day (when the MSO bites) cannot be before 1 July 2022, record‑keeping and reporting requirements may reach backward.

3. No express sunset for the civil penalties: The new civil penalty provisions are inserted into the Petroleum and Other Fuels Reporting Act permanently. They are not limited to the transitional period. Even after the regime is fully operational, false reports and audit non‑cooperation are penalised indefinitely.

4. The interplay with s 21 of the Petroleum and Other Fuels Reporting Act: The note added by item 12 says that the powers, functions and duties of entrusted persons “are not limited to those conferred or imposed by this Act”. This means an entrusted person (a government official) could use information obtained under the Petroleum and Other Fuels Reporting Act for purposes under the Fuel Security Act 2021 even if there is no specific authorisation. This expands the government’s information‑handling powers without explicit carve‑outs for commercial confidentiality.

5. The false‑information penalty attaches to MSO compliance and payment eligibility - but not to the entire report: New s 13A only covers two specific subjects: whether a regulated entity is complying with s 7 of the Fuel Security Act 2021 (the MSO), and whether a fuel security services payment is payable. If a report contains false information about other matters (e.g., fuel quality), the general false‑information provisions of the Petroleum and Other Fuels Reporting Act (s 13) may apply, but the 300‑unit penalty is exclusive to MSO and FSSP matters. A reporter could face two different penalty regimes for the same report.

6. Court references were updated late: The Part 2 amendments (updating court names) did not commence until 1 September 2021, but the substantive provisions of the Fuel Security Act 2021 commenced on 30 June 2021. This means that for the period 30 June 2021 to 1 September 2021, the Fuel Security Act 2021 still referred to the now‑abolished Federal Circuit Court. If any matter arose in that window, the correct court would have been unclear. In practice, no proceedings likely started in that narrow window, but the drafting is technically sloppy.

7. The auditing rules are left entirely to delegated legislation: Sections 13B, 13C and 13D of the Petroleum and Other Fuels Reporting Act are all contingent on rules being made. The Act itself does not prescribe any audit standards, frequency, or procedure. This gives the Minister (or the rule‑maker) very broad discretion to design the audit regime without parliamentary oversight of the primary Act. A regulated entity cannot know its audit duties until the rules are published.

8. No grandparenting for existing stockholding arrangements: The definition of “holding stock” for MSO purposes uses s 19 of the Fuel Security Act 2021, which may adopt a different concept of holding than the ordinary commercial meaning. The transitional provisions do not exempt stocks held under existing contracts or arrangements before the obligation day. An entity could be deemed to hold stock that it does not legally own, with all the audit and reporting obligations that follow.

Compliance with this Act essentially means compliance with the obligations it creates through the amendments to the Petroleum and Other Fuels Reporting Act 2017. Since the Act is procedural, an entity subject to the Fuel Security Act 2021 should take the following steps:

Step 1: Identify whether you are a regulated entity, an Australian controlling corporation, or an entity in possession of MSO stocks. The first step is to determine if the MSO applies to you under the Fuel Security Act 2021. If so, the reporting and audit obligations of the Petroleum and Other Fuels Reporting Act, as amended, apply. If you are a third‑party storage provider that holds stocks for a regulated entity, you are likely an “affected” person for audit purposes, even if you are not the entity subject to the MSO.

Step 2: Ensure reporting systems capture MSO stock data. The definition of fuel information now includes the holding of MSO products. From 1 July 2022, your s 11 reports under the Petroleum and Other Fuels Reporting Act must include information about stocks held within the meaning of s 19 of the Fuel Security Act 2021. This may require new data collection systems if your current reporting only covers non‑MSO stocks.

Step 3: Verify the accuracy of any information in reports that touches on MSO compliance or fuel security services payment eligibility. The false‑information penalty in s 13A is strict (civil penalty, not requiring fault). You must implement verification procedures for any data point that relates to whether you are complying with s 7 of the Fuel Security Act 2021 (your stockholding level) or whether you are eligible for a fuel security services payment. Omissions matter - if your report leaves out a fact that makes the information misleading, you are also liable.

Step 4: Prepare for compliance audits. Rules made under s 13B(1) will set out audit requirements. Until those rules are published, you should assume that audits may be required at any time. Key actions:

• Designate an internal contact person for audit liaisons.
• Ensure that all records supporting s 11 reports are retained and accessible.
• If you are a third party in possession of stocks held by a regulated entity, ensure that the regulated entity has your cooperation agreement in place, and that you can provide access to premises and records on short notice.

Step 5: Understand the duty to provide reasonable facilities and assistance. This duty is not qualified by commercial sensitivity. If an audit team leader asks for access to your computer systems, data, or staff, refusing could risk the 250‑penalty‑unit civil penalty. You may wish to seek legal advice on what is “reasonable” in the circumstances, but the safer course is to cooperate and raise any concerns about overreach with the Secretary rather than unilaterally withholding access.

Step 6: Monitor the rules. The Act is skeletal. The operative detail - what is audited, how often, what reports are required - will be in rules made under s 84 of the Fuel Security Act 2021. You should actively monitor the Federal Register of Legislation for those rules, and for any amendments to them. The rules may also prescribe the period for which you must report pre‑commencement stocks.

Step 7: Review confidentiality arrangements. If you use external auditors or consultants to prepare s 11 reports, ensure they are aware that information they provide may be protected information under both the Petroleum and Other Fuels Reporting Act and the Fuel Security Act 2021, and that they must not disclose it without authorisation. Conversely, if you receive information from the regulator, it may now be disclosable to other agencies under the expanded information‑sharing provisions.

Step 8: If you are an applicant for fuel security services payment, wait for the rules. The transitional provisions block applications until rules are made under s 39(3) of the Fuel Security Act 2021. Do not submit an application before those rules exist - it will be invalid.

Step 9: Conduct internal training on the new civil penalties. Officers who sign off on s 11 reports should be briefed that a mistake that makes the information false or misleading in a material particular can lead to a penalty of $93,000+ without any intention to deceive. This is a significant change from the general reporting regime where penalties may require knowledge or recklessness.

Step 10: Consider the interaction with other Acts. If your business is also subject to competition reviews (CCA) or fuel quality standards, the expanded disclosure permissions mean that information you provide to one regulator could be shared with the fuel security regulator. You should assess whether your commercially sensitive information is adequately protected, and whether any claims for confidentiality need to be made at the point of submission.