States are insisting the Albanese government take on a national leadership role managing the prospect of emergency measures to cut demand for oil, fearing any piecemeal state-by-state approach would create COVID-era confusion and anxiety.
As Prime Minister Anthony Albanese used a speech on Monday to warn of a prolonged economic hit caused by Strait of Hormuz’s blockage, NSW Premier Chris Minns and Victorian Premier Jacinta Allan raised the prospect of extraordinary interventions to conserve oil should shipments dry up, though both emphasised such precautions were not yet needed.
Several state energy ministers, including Labor government ministers, are telling Energy Minister Chris Bowen the federal government must take a lead role in co-ordinating Australia’s response to the oil shock that the International Energy Agency has described as the worst crisis to ever hit the global fuel market.
Two sources familiar with a meeting of energy ministers on Friday, but not authorised to speak about it publicly, said states were worried that fuel companies would discriminate against states that individually introduced measures such as price caps or fuel rationing.
States would prefer the Commonwealth lead a national conversation about what Australians might need to do if there is a fuel shortage, even if the recommendations were voluntary and light-touch.
Asked about fuel rationing on Saturday, two days after he convened national cabinet and appointed a fuel co-ordinator, Albanese said: “That’s a decision for state and territory government, so it’s not a question for me.”
Most states, including NSW and Victoria, have the power to ration and effectively take over supply and distribution of fuel under their own legislation. But state leaders have emphasised, in private and in public, similar federal powers held under the Liquid Fuel Emergency Act, which Bowen said had never been invoked.
“Not through the first two Gulf Wars, not through COVID. It’s not designed to be invoked lightly,” Bowen said on ABC on Sunday. “I would need to be satisfied that there’s a real shortage and that the powers under that act are useful.”
One source involved in planning between state and federal governments said that while states had special powers, it was incumbent on the Commonwealth to use its status to communicate a consistent national message at a time when Australians nationwide were anxious about the future.
“States went their own way during COVID and that shouldn’t be repeated,” the source said.
It is common for states to seek to shift responsibility to the Commonwealth, but the states’ frustration adds to scrutiny on the Albanese government and the urgency of its response.
In a speech to the minerals sector on Monday night, Albanese will appeal to Australians’ “progressive patriotism” to avoid hoarding of fuel.
“Our government will continue to look at every practical option to protect Australia from the worst of this international crisis,” he said.
“Putting our faith in the practicality – and patriotism – of Australians.”
Victoria on Monday said the Commonwealth should lead the response.
“Should there be additional measures that need to be taken to manage supply … it is my view that that is something that does need to be co-ordinated through that national cabinet,” Allan said. “There will need to be a nationally co-ordinated approach here.”
In NSW, Minns said his government would “of course take emergency measures if required, but those measures themselves have an impact on the economy.”
“We want to make sure we only do it when we absolutely have to,” he said.
A communique from the energy ministers’ meeting on Friday said ministers had agreed there were “shared responsibilities and it will be critical to work together to maintain fuel security by anticipating risks”.
Bowen released figures showing 37 of NSW’s 2444 service stations had run dry, while 109 were out in Victoria and 47 in Queensland.
The Albanese government has largely sidestepped questions on measures suggested last Friday by the International Energy Agency, such as cutting down flights or driving more slowly, although ministers have said that working from home could be a sensible step for individuals.
The International Energy Agency’s director, Fatih Birol, did not express concern about Australia’s fuel reserves, which are below international standards, a day after Bowen revealed that six of 81 oil tankers headed for Australia had been cancelled.
“I think the 38 days is a solid number, and I know that more ships will be sailing through and bringing more of these and other products to the markets,” Birol said at the National Press Club in Canberra.
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