Melbourne, Australia – A multimillion-dollar advertising campaign encouraging Australians to save fuel for “our truckies” is just one of the ways the government is trying to address shortages caused by the war on Iran. Since early March, the Strait of Hormuz, through which 20 percent of the world’s oil and liquefied natural gas (LNG) supplies are shipped during peacetime, has been effectively closed and shipping traffic has fallen by 95 percent. Australia’s heavy reliance on oil refined in South East Asian countries which, in turn, import crude oil through the Strait of Hormuz has seen the government turn to “fuel diplomacy” and fuel tax cuts to try to limit price shocks.
But experts told Al Jazeera that such measures are little more than “sugar hits” which will do little to address longer-term problems associated with Australia’s heavy reliance on fossil fuels. Australia imports about 80 percent of the refined fuels it needs, much of it from “regional refining hubs such as Singapore, South Korea and Malaysia, which in turn depend on crude oil imports from the Middle East”, said Hussein Dia, professor of transport technology and sustainability at Swinburne University of Technology in Melbourne. In a bid to bridge this gap, Australia’s Prime Minister Anthony Albanese has turned to “fuel diplomacy”, said Dia, with recent visits to Singapore, Malaysia and Brunei, where he has been trying to shore up the supply of fuel and fertiliser.
As a major exporter of LNG and coal, Australia has some leverage in these negotiations, said Tim Buckley, director of think tank Climate Energy Finance (CEF). But, he added, it is notable that Australia’s position is very different to that of its historic ally, the US, which is not as dependent on oil exported through the Strait of Hormuz. At home, the Albanese government has sought to ease the burden of rising petrol prices on consumers by halving a federal tax on fuel.
Yet while many Australians primarily view the widespread consequences of the regional war through the lens of prices at the petrol pump, experts told Al Jazeera that cutting fuel taxes will not address the longer-term issue of Australia’s reliance on imported refined oil. The policy is a “sugar hit” that could prove “counterproductive”, said Ketan Joshi, a freelance writer and senior research associate at the Australia Institute. Yet, according to Dia, electric vehicle (EV) sales in Australia have remained relatively low at around 10 percent in recent years, “compared to much higher shares in countries such as China”.
To try to reduce demand for petrol, the Australian states of Victoria and Tasmania offered free public transport from the beginning of April, alongside Queensland, which is already offering low-cost fares of 50 cents ($0.36). New South Wales announced plans this week to invest $100 million in EV chargers. A fire at the crucially important Geelong Oil Refinery in Victoria this week has reminded policymakers that Australia’s domestic supply of refined oil is provided by just two facilities, both more than 50 years old.
Geelong is the largest, producing 120,000 barrels of refined oil per day; the other is the Ampol Lytton Refinery in Brisbane, Queensland. The fire, which burned for several hours at Geelong – coinciding with the energy crisis – prompted Australian Energy and Climate Minister Chris Bowen to cancel a trip to the Petersberg Climate Dialogue in Germany next week, according to the Australian Financial Review. Bowen recently told reporters in Canberra that, unlike oil, “the Australian sun cannot be interrupted by a war or anything else”.
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