Morrison govt spends $250m more on refineries

PRIME Minister Scott Morrison has confirmed that the federal government is paying $250 million for Australia refineries to upgrade the standard of fuel produced locally while at the same time improving the nation’s fuel security.

 

Two payments of $125 million, one to the Viva Energy (Shell) refinery in Geelong, Victoria and the other to the Ampol refinery in Lynton, Queensland, will be matched by the companies, taking the total investment in upgrades to the facilities to $500 million.

 

Speaking to media outside of the Viva Energy refinery, Mr Morrison said the elevated fuel prices brought about by the Russia-Ukraine conflict showed Australia is not immune from global price fluctuations, and that the upgrades made to Australia’s remaining two refineries will help to secure fuel supplies and jobs, while also improving the quality of liquid fuels sold at the bowser.

 

“COVID-19, the Russian war in Ukraine and trade restrictions have disrupted global supply chains and Australia is not immune. Oil refineries literally fuel a stronger economy, and these investments will ensure upgrades are made to improve the quality of our fuel,” said Mr Morrison.

 

According to a report published by the Australian Financial Review, recent refinery closures have forced the government to contribute as much as $2.3 billion over the past 12 months towards “propping up” the industry. Recent geopolitical developments have exacerbated the issue further, demonstrating that Australia’s reliance on imported crude is now more critical than ever.

 

Mr Morrison said the money will protect 1250 refinery jobs and create a further 500 positions through the construction and upgrade process which is expected to continue until the end of 2024.

 

The upgrades are expected to contribute to a reduction in the sulphur content of Australian petrol to below 10 parts per million, further improving the fuel economy of petrol-powered vehicles and reducing negative health impacts within the community.

 

Mr Morrison also reiterated his government’s recent halving of the petrol excise to 22.1 cents per litre of diesel or petrol as a benefit to cost-of-living pressures, the measure expected to cost the budget some $3 billion in lost revenue over the next six months.

 

Energy minister Angus Taylor said that bringing forward the rollout of ultra-low-sulphur fuels will benefit all Australians and contribute to an estimated $1.02 billion dollar saving in avoided health costs.

 

“Bringing forward the rollout of ultra-low sulphur fuel from 2027 to 2024 will deliver significant health benefits for Australians through improved air quality,” Mr Taylor told the Australian Financial Review.

 

“This is estimated to result in $1.02 billion in avoided health costs. The grants are the next step in the Morrison government delivering on our commitment to support Australian domestic refiners to keep producing local fuel for Australian motorists.”

 

The Federal Chamber of Automotive Industries has cautiously welcomed Mr Morrison’s announcement with FCAI CEO Tony Weber saying increasing fuel quality was an important step in reducing Australia’s transport sector emissions.

 

“A reduction in sulphur is a move in the right direction. This will assist Australia’s internal combustion fleet to run more efficiently,” said Mr Weber.

 

“However, further work needs to be done to bring Australia’s fuel quality in line with global standards.

 

“Australia’s fuel quality is lagging two decades behind the advanced world. This adversely impacts both the environment and the engines available to Australian motorists.

 

“If taxpayer funds are used to assist the refining industry, Australians should be provided with world-quality fuel in return.”