Australia’s fuel supplies may appear stable on paper, but a leading energy expert has warned the country is heading towards a critical crunch point in April, with “alarm bells” likely already ringing in government.
Energy and resource analyst Saul Kavonic said official stock figures were failing to reflect the true availability of fuel, warning shortages could emerge well before reserves are depleted. “Stock levels are not representative of fuel available for immediate distribution,” he said.
“We will face structural shortages well before reported stock levels reach zero.”
The warning cuts against the Federal Government’s repeated insistence that Australia’s fuel supply remains secure, with ministers this week pointing to stable stock levels and incoming shipments as reassurance.
Mr Kavonic said the timing of global supply disruptions meant the real impact had not yet been felt, and would begin to hit within weeks.
“Australia is still running on pre‑war supply now,” he said.
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“It takes several weeks for a supply disruption in the Middle East to flow through the value chain to fuel here in Australia. The real crunch point for our fuel supply will only occur in April. This is now inevitable, as even if the war ends tomorrow it will take several weeks to ramp up supply again.”
Yesterday, news.com.au reported oil deliveries to Australia could slow significantly by around April 20 as the shock radiates through global supply chains, with a map indicating “most deliveries” to Australia would stop on that date.
Australia is particularly exposed, importing the majority of its refined fuel from Asia, much of which relies on crude shipments passing through the Strait of Hormuz.
While the Federal government maintain there is sufficient fuel on the way, data shows a more complex picture.
As of 30 March, ship tracking indicated five tankers carrying jet fuel, equivalent to around six days’ consumption, were due to arrive in Australia between 31 March and 16 April.
At the same time, around 39 days of crude oil and 15 days of refined product were forecast to be in transit to Australia.
The latest official stock held under the Minimum Stockholding Obligation published by the Department of Climate Change, Energy, the Environment and Water (DCCEEW) on March 26 show Australia sitting at 39 days of petrol, 30 days of diesel and 30 days of jet fuel.
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However, a significant portion of Australia’s reported fuel stocks is not immediately usable.
As at 24 March, most stocks were held in storage around the country, with roughly 20 per cent, about 4–5 days of each fuel type, on water within Australia’s exclusive economic zone.
That distinction is critical.
Mr Kavonic said constraints tend to emerge long before total reserves are exhausted.
“Structural shortages means it becomes impossible to procure fuel at any price, so demand destruction eventuates,” he said.
“Higher costs is nowhere near as big a problem as not being able to get fuel at any price.”
The most immediate risk lies in jet fuel and diesel, both essential to keeping the economy moving.
Mr Kavonic warned jet fuel shortages were already becoming acute following restrictions on exports from China.
“Shortages of jet fuel may impact freight and passenger flights and air force use. It presents a livelihood, economic and national security issue,” he said.
Diesel, which underpins transport, agriculture and mining, is also expected to come under pressure as supply tightens.
In response, the Federal Government has moved to shore up supply, including underwriting additional fuel cargoes and cutting fuel excise by 26.3 cents per litre to ease cost‑of‑living pressures.
Australia has also sourced replacement fuel from further afield, including the United States, after several shipments from Asia were cancelled or deferred, with shipping data indicating five US cargoes totalling almost two million barrels of petrol and diesel due from mid‑April through early May.
But Mr Kavonic said the scale of the disruption meant the coming weeks would be telling. “Mid‑April is key.
We should have visibility on shortages within two weeks,” he said.
The situation, he said, should serve as a broader wake‑up call for Australia’s fuel security, after decades of declining domestic refining capacity and growing reliance on imported fuel.
“But behind the scenes the alarm bells are going off and the Government knows this could be a crisis approaching Covid levels unless they put all hands on deck to sure up fuel supply.”
