The consumer watchdog has directed petrol retailers to pass on the full benefit of record low oil prices to motorists, warning them against using coronavirus as an excuse to extend their booming profits.
ACCC boss Rod Sims is advising motorists to shop around for the best price and send a “strong message” to petrol stations that have not yet passed on the price decreases.
The pandemic has heavily dampened demand for fuel and sent global oil markets into turmoil, with a supply glut driving crude oil prices into the negative for the first time, trading as low as negative $US40 ($63).
Since the beginning of the year, overall crude oil prices have decreased by $US50 per barrel.
Australia is exploiting the market tumult to establish a strategic fuel reserve which will safeguard supplies in times of crisis with the federal government seizing on record low oil prices.
Energy Minister Angus Taylor said the reserve would initially be located in the United States.
While Australia doesn’t have the capacity to store the fuel right now, and the government wants to take advantage of these historically low fuel prices.
“In the event there is a global disruption that slows fuel supplies moving around the world, we will get access to the fuel we need to keep our country going,” Mr Tayor told reporters in Canberra on Wednesday.
The government will spend $94 million on kickstarting the strategic reserve designed to lower Australia’s exposure major supply chain disruptions.
“Now is the time to get in and start building the strategic fuel reserve,” Mr Taylor said.
“We now have the historically low prices that allows us to do this and to do it in a way which is attractive for the taxpayer.”
Discussions between the government and private sector are ongoing about building more storage capacity to house the fuel reserve in Australia.
When quizzed on how many days of fuel are available on Australian soil, Mr Taylor said it was “typically 20 to 30 days”.
“Those numbers have gone up in recent times. And we would like those numbers to be higher. Now is the time to get in and start building the strategic fuel reserve,” he said.
“It’s been talked about for many years. We now have the historically low prices that allows us to do this and to do it in a way which is attractive for the taxpayer.”
Mr Taylor said more onshore storage was a long-term goal.
“I signed an agreement with the United States to access their reserves, simply because we don’t have the storage space here in Australia right now,” he said.
It is estimated the cost of building more storage in Australia could be in the billions.
-with AAP
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