Australian fuel: Global spot market leaves Australia’s suppliers with mere hours to buy shipments

Australia’s fuel distributors are in a global scramble to secure shipments to keep supplies flowing across the country, sometimes having mere hours to decide whether to spend the millions of dollars needed to lock in a delivery.

Energy Minister Chris Bowen revealed that with movement through the Strait of Hormuz still highly restricted, Australian suppliers are having to turn to the spot market.

It tends to have higher prices, which is why the Government is using Export Finance Australia to underwrite purchases.

“Those spot cargoes come up at very short notice … a ship becomes available for sale, maybe in Korea or Malaysia, and companies have two or three hours to decide whether to buy it,” Mr Bowen told reporters in Sydney on Friday.

“We want them to have the flexibility to go and get that fuel for Australia and for Australians.

“I think the events of the last 24 hours have shown that this arrangement is even more important, because the oil price is moving around so much.”

Crude oil prices leapt above US$114 a barrel this week, then plummeted to $94 after US President Donald Trump announced a two-week ceasefire, but have risen again once it became clear the Strait of Hormuz hadn’t yet reopened.

Prime Minister Anthony Albanese is in Singapore today for talks with that country’s Prime Minister, Lawrence Wong, aimed at securing fuel supplies for Australia.

There are 192 service stations with no diesel on Friday, out of 7940 stations nationally.

The price of diesel has remained high and on Thursday surpassed the level it was before the Federal Government halved the fuel excise on April 1.

Mr Bowen said there was still a “very high demand” for diesel, especially in the regions.

“A lot of people are working hard to keep up that supply … with farmers particularly in NSW being prioritised for direct deliveries so that they can keep up the sowing and seeding they need to do to ensure ongoing food supply for us in the coming weeks and months,” he said.

Deputy Liberal leader Jane Hume said the Opposition was frustrated, particularly for West Australians who relied heavily on diesel.

“Why the price there is higher than anywhere else is a mystery,” she told Seven’s Sunrise, reiterating calls for a national dashboard of fuel prices and shortages.

“This is available information, but it’s really unclear right now. A national dashboard would create certainty in industry so they can make decisions about when they buy fuel and where they buy fuel.”

Each of the States already has its own website that shows fuel prices and availability.

With news that Iran may seek to impose tolls on ships passing through the Strait of Hormuz, questions remain about the price and availability of fuel supplies, given that many of Australia’s Asian partners source their crude oil from the Middle East.

Acting Prime Minister Richard Marles wouldn’t say whether Australia would be concerned if the countries it purchased refined fuel from had paid Iran’s Islamic Revolutionary Guard Corps (which is listed as a terrorist organisation in Australia) for passage of their crude supplies.

He said Australia supported the global rules-based order, which included freedom of navigation in international waters like the Strait of Hormuz.

“That’s what we need to be working to as a global community, is to have the Straits of Hormuz open and where there is freedom of navigation through the Straits of Hormuz and where the rules‑based order applies. And that’s really the position of Australia,” he said, when asked about payments to the IRGC.

“Now, in the here and now, we are working with our partner countries in East Asia that supply us with liquid fuels to make sure that Australia is supplied with fuel during this contingency.”