As a crucial component to delivering Australia’s long-term fuel security, the government has introduced a national minimum stockholding obligation (MSO). The MSO will be supported by Australia’s sovereign refining capability through the Fuel Security Services Payment, which will protect fuel consumers and the economy by ensuring ongoing fuel availability in the event of an emergency.
The MSO will commence from 1 July 2023. The legislative requirements of the MSO are confirmed by the Fuel Security Act 2021 and the Fuel Security (Minimum Stockholding Obligation) Rules 2022.
The MSO requires Australia’s major fuel importers and refineries to hold baseline level stocks of:
- petrol (24 days, increasing to 27 days in 2024 for importers)
- diesel fuel (20 days, increasing to 32 in 2024 for importers)
- jet fuel (24 days, increasing to 27 days in 2024 for importers).
Through an online reporting system, refiners and importers will be required to confirm stock levels fortnightly, then weekly from 1 July 2024.
Increase in diesel stockholdings
The MSO will deliver a major increase in stockholdings of diesel from 2024 through the MSO.
Whilst the use of alternative fuels and new vehicle technology is increasing, diesel demand is expected to continue to grow as alternative energy options are currently limited.
We currently hold significantly less diesel stocks in the country than the other fuels. Yet, diesel is our most critical fuel in a shortage or emergency scenario, contributing to vital sectors of the economy such as transport, mining, agriculture, essential services and defence.
Increasing the amount of diesel stocks held in Australia reflects the importance of diesel to our domestic fuel security as we implement our emissions reduction targets.
The increase in diesel stocks is supported by the Boosting Australia’s Diesel Storage Program.
Entities obligated under the MSO
To be obligated under the MSO, entities must have imported and/or refined one or more of the key transport fuels which exceed the following thresholds:
- petrol – 200 megalitres
- diesel fuel – 250 megalitres
- jet fuel – 250 megalitres.
For additional information regarding the legislative requirements of the MSO, please see the following: