Four million litres of diesel is set to arrive in Western Australia “in the coming weeks” as part of a strategic stockpile to address acute, localised fuel shortages across the state.
WA Premier Roger Cook said the supply had been secured through a deal with independent fuel supplier Cambridge Gulf, and would be stored in the Kimberley region.
Roger Cook says the stockpile will be stored in the Kimberley. (ABC News: Courtney Withers)
“It will be 100 per cent owned by the state, that means it can be directed to where it is needed most,” he said.
Energy minister Amber-Jade Sanderson said the state stockpile — separate from the national reserve — was necessary to address WA’s unique geography.
“We are the largest single jurisdiction in the world, we have specific needs, which is why we need to have our own stockpile,” she said.
Energy Minister Amber-Jade Sanderson says she expects the diesel to be “cost neutral” for taxpayers.
 (ABC News: Courtney Withers)
“We saw earlier in March that it wasn’t so much volume that was the issue, many of those communities and operators need quite a small volume, but getting it to them was the challenge.
“This is not fuel for general public use, this is a top-up for those areas when there are acute needs, or those times where we saw those very localised supply chains fail.”
The fuel is set to be stored “free of charge” at Cambridge Gulf’s facility in Wyndham, in the state’s north, according to the premier.
‘Won’t touch the sides’
The national reserve fell to 2.2 billion litres from about 2.7 billion litres of diesel after the federal government released about five days worth of diesel from the emergency stockpile.
WA Nationals leader Shane Love said the state government’s stockpile of four million litres was “woefully inadequate”.
“The Nationals WA welcome any move to ease the diesel shortage in regional WA, but it comes after weeks of inaction and paralysis from the Cook Labor government,” he said.
Shane Love says the stockpile won’t do much to ease shortages. (ABC News: Kema Johnson)
“The reality is four million litres won’t touch the sides.”
Mr Love said the shortage being faced by just the state’s agricultural sector far out-stripped the emergency stockpile.
“The WA agricultural sector alone is already more than 10 million litres short of diesel, and that’s before you factor in remote communities and essential services,” he said.
“At best, this supply will last less than four days.”
Stockpile will last ‘six hours’
WA Shadow Energy Minister Steve Thomas said the government’s announcement highlighted the scale of the disruption to the global fuel supply chain.
“Western Australia consumes around six billion litres of diesel every year, mostly in transport, mining and agriculture sectors. This equates to an average daily consumption of 16.4 million litres,” he said.
“The storage of four million litres of diesel sounds significant but represents six hours of average consumption.
“While I welcome today’s announcement, it highlights the scale of the problem. Storing significant amounts of fuel is a long term and very expensive exercise.”
Ms Sanderson said she expected the diesel to be “cost neutral” for taxpayers, after it was sold on to consumers.
“The cost for the overall volume is around $10 million,” she said.
“It will be sold on market rates, at the time that it’s needed, certainly won’t be more than that.Â
“The aim is to limit the impact on the taxpayer, but to ensure that those communities are protected, and we build resilience in that supply chain.”
New powers
Emergency powers invoked by the WA Government to help address the fuel crisis will be ratified in state parliament today.
Ms Sanderson said the powers, which can be used to compel fuel companies to divulge information about their stocks and pricing, would allow the government to adequately address supply chain issues.
Consumer pain within ‘weeks’ if WA diesel supplies aren’t resolved
She said they would offer “the most detailed supply chain information of any other state and territory”, and “allow us to resolve any future demand spikes or supply issues”.
Mr Cook said the data from fuel suppliers would also help ensure any benefits from government interventions, like the fuel excise, were flowing on to consumers.
“Nobody should be profiting from this situation, especially when there are so many doing it tough,” he said.
Mr Cook said the government had received the information it initially requested from all fuel companies about volume and distribution, but Consumer Protection would now be seeking more.
“The Commissioner for Consumer Protection will be writing to all fuel suppliers in Western Australia this week to compel information on pricing to determine whether the fuel cuts have been passed on to consumers,” Mr Cook said.