Middle East conflict exposes Australia’s fuel insecurity

The issue will be high on the agenda when grower representatives from across Queensland gather in Mackay today for a meeting of CANEGROWERS Policy Council. 

Just 11 days into the expanding Middle East conflict, prices are already rising at the bowser and industries across the economy are questioning how secure Australia’s fuel supply really is.

Agriculture is among those watching closely, with farmers, transport operators and contractors bracing for tighter fuel supplies in the months ahead if global markets deteriorate further.

CANEGROWERS Chief Executive Dan Galligan said the situation highlights how exposed Australia remains to global fuel shocks.

“Australia imports the vast majority of the fuel we use, and much of it moves through some of the most volatile regions in the world,” Mr Galligan said.

“When conflict escalates in the Middle East it quickly flows through to global oil markets, and Australians feel it almost immediately at the bowser.”

Mr Galligan said uncertainty about supply was already beginning to ripple through the economy.

“Farmers, transport operators and trucking companies are starting to get nervous about what this could mean for fuel availability if the conflict drags on,” he said.

“In the sugarcane industry the crush is still almost three months away, but harvesting contractors are already asking whether they’ll be able to secure enough diesel to run their harvesters and haulout equipment when the season begins.”

Mr Galligan said expanding domestic ethanol production could help shield Australia from future supply shocks.

“Ethanol made from Australian crops like sugarcane can replace a portion of imported petrol and provide a reliable domestic supply,” he said.

“It won’t replace petrol altogether, but it can reduce our exposure to volatile global markets."
Some Australian states, including Queensland and New South Wales, already have ethanol mandates in place, but these are not consistently enforced.

Mr Galligan said implementing a properly enforced national E10 mandate would strengthen fuel security while encouraging investment in domestic production.

“An enforced E10 mandate would mean around 10% of the fuel Australians use could be produced right here at home rather than shipped in from the other side of the world,” he said.

“That’s a practical step towards making Australia’s fuel supply more resilient during periods of global instability.”

Mr Galligan said ethanol also offered a straightforward way to strengthen supply without requiring changes from motorists.

“Most petrol cars on the road today can safely run on E10,” he said.

“Producing more of our own fuel here in Australia would make our supply more resilient and help reduce the impact of international shocks on prices at the bowser.”