All fuel users need to analyse and understand their own fuel use and to consider how best to manage the potential impacts of reduced fuel supply
- Many larger fuel users only hold limited stocks on the expectation that stocks will be held by fuel suppliers, or indeed governments will intervene to protect their interests if supplies are limited.
- This expectation creates a vulnerability in the transport fuels supply chain.
- Fuel suppliers do not hold buffer stocks to guarantee the ongoing normal business operations of all major fuel users and distributors during a major fuel supply disruption.
- Major fuel users are best placed to make decisions about:
- their need for liquid fuels, and the way they use those fuels, based on information about the price and availability of fuels meeting their operational requirements; and
- how they will manage the risks of a disruption so that their commercial and community interests are maintained.
- Therefore, it is in the interests of all fuel users to analyse and understand their own fuel use and to consider how best to manage the potential impacts of reduced fuel supply.
- Following this analysis, a robust business continuity plan should be established with effective response options to deal with the specific (and varying) circumstances of any fuel supply disruption.
- Actions should also be taken by major fuel users to address any unacceptable business risks arising from a fuel supply shortage, including investing in their own extra stockholdings and storage capacity, improving fuel supply management (either on their own or through their major fuel supplier), and changing business operations to avoid or minimise the impact of possible fuel supply disruptions.
During a national fuel emergency, fuel users may only be able to buy a proportion of the fuel they need at any time
- All parties will need to prioritise and conserve fuel use during a national or even State based emergency until normal fuel supply is restored.
- All Australian governments have agreed that emergency services should have ‘priority access’ to fuel in a national emergency.
- These fuel users are defined as 'Essential Users' in the LFE Act and in the Liquid Fuel Emergency (Essential Users) Determination 2008 and include Defence, ambulance, corrective, fire, emergency and police services, as well as public transport and taxis.
- These fuel users contribute to the provision of goods or services which, if reduced in supply or availability, would be likely to seriously damage the health, safety or welfare of the community.
- During a national emergency, essential users may be entitled to fuel above and beyond that which is available to other fuel users.
- It is highly unlikely that fuel supply would ever be restricted to essential users only.
- All other fuel users will continue to receive a proportion of their normal fuel supply (under a bulk allocation or retail rationing scheme directed by government) depending on the available fuel supply.
- All businesses and consumers will receive an equitable share of the available fuel supply.
- This framework ensures that during a national liquid fuel emergency, available fuel supply is managed and allocated in the most efficient and fair way, to help minimise the economic impacts of the shortage on fuel users and customers.
Essential users of fuel would have priority supply in a fuels emergency
- Essential users are defined in legislation and are those who contribute to the provision of goods or services which, if reduced in supply or availability, would be likely to seriously damage the health, safety or welfare of the community (see above).
- During a national fuel emergency, essential users may be entitled to fuel above and beyond that which is available to other fuel users.
- The Federal Industry Minister may determine an activity to be an essential activity at any time, but the Minister must be satisfied that it is essential to the health, safety or welfare of the community in the context of the national emergency at the time.