About the agreement on an IEA program treaty
Australia is a signatory to the International Energy Agency (IEA) agreement on an international energy program (IEP) treaty and participates in IEA oil market and energy emergency committees.
Key requirements under the IEP treaty are that member countries:
- hold oil stocks equivalent to at least 90 days of their prior year’s daily net oil imports
- in the event of a major oil disruption, contribute to IEA collective actions by way of a stock release, demand restraint, fuel switching, or increased production or fuel sharing
Australia has historically relied on commercial stock levels to meet the 90 day requirement. Due to declining domestic production and increased demand for liquid fuels, these stocks are no longer sufficient to meet the 90 day requirement. Consequently, Australia has been non-compliant with the 90 day stockholding obligation since March 2012.
The Australian Government is currently implementing a plan to return to compliance with the IEA’s stockholding requirements.
Plan for return to compliance
In June 2016, the IEA Governing Board noted the Australian Government’s plan for returning to compliance with the 90 day stockholding obligation. The pilot phase of the 2 stage compliance plan includes:
- the introduction of mandatory reporting of Australian Petroleum Statistics from January 2018
- the purchase of up to 400 kilotonnes of oil tickets in each of the financial years 2018-19 and 2019-20, to enable Australia to contribute to an IEA collective action. Tickets are used by some IEA members to supplement in-country stocks to meet their stockholding obligation, and can be used to contribute towards collective action in the event of an oil supply disruption
- a commitment to develop a long-term strategy to return to full compliance with the 90 day stockholding obligation by 2026. This strategy is under development
In August 2017. Parliament passed the Petroleum and Other Fuels Reporting Act 2017 to establish a mandatory reporting obligation to improve the quality and accuracy of Australia’s petroleum statistics. The reporting obligation commenced on 1 January 2018.
The Petroleum and Other Fuels Reporting Rules 2017 (Rules) came into effect in November 2017. The Rules set out that the reporting obligation applies to businesses producing, processing, wholesaling and storing significant volumes of petroleum, petroleum‑based products and alternative fuels such as biofuel.
Further information on the reporting obligation and statistics is available at the Australian Petroleum Statistics page.
If you have any questions on mandatory reporting or the resulting statistics, please email petroleum.statistics [at] environment.gov.au
Oil stock ticketing
In September 2017, Parliament passed the Liquid Fuel Emergency Amendment Bill 2017 to allow the Australian Government to enter into commercial oil stockholding contracts with Australian and foreign entities. These contracts include purchasing rights to access oil stocks, also known as ‘ticketing’.
If you have any questions about the oil ticketing process, please email oil.tickets [at] environment.gov.au