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(Bloomberg) — Australia’s Energy Minister Chris Bowen says rural and regional areas are facing “real and unacceptable shortages” of fuel, a ripple effect of the US-Israel war with Iran that has caused global oil prices to surge.
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Bowen’s comments came a day after the government announced it would release fuel from its emergency stockpile to meet demand in rural areas. He said the additional supply would not reach the market immediately.
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The shortage has been driven by a “massive explosion in demand” not because of any supply disruptions, Bowen said, adding Australia had received all of its shipments of petrol and diesel as expected.
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Demand is “up 100% at every terminal across Australia,” the minister said at a press conference on Saturday. “This has seen shortages for farmers, for people in regional areas in particular, which the government has been working very hard with the industry to get addressed as quickly as possible.”
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Bowen was presenting the government’s first weekly report on fuel reserves after shifting from quarterly reporting.
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Australia holds 1.6 billion liters of petrol, the equivalent of 37 days of supply, up from 36 days in the last report. Diesel reserves stand at 2.7 billion liters, the equivalent of 30 days.
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Farmers have warned the conflict-driven energy crisis could lead to smaller plantings and reduced food production, while trucking groups say higher fuel costs could soon flow through to consumers. Airlines have also begun raising fares to account for rising costs. Jet fuel prices had risen by as much as 150% over a two-week period, Qantas Airways Ltd said.
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Bowen said Australia was not facing an immediate jet fuel shortage, but that the government was in close communication with Virgin Australia and Qantas, the country’s two largest airlines. Australia has the equivalent of 29 days, or about 800 million liters, of jet fuel supplies, he said.
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“They have fuel on hand for the immediate and foreseeable future,” Bowen said. “But, obviously, any impacts from global supply will be something that we will very carefully monitor and work with” Australia’s airlines to ensure they are well placed, he said.
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https://financialpost.com/pmn/business-pmn/australias-rural-areas-facing-unacceptable-fuel-shortages
