Oil refinery deal to save us from bowser price pain
Families and businesses will be protected from higher prices at the bowser and hundreds of Brisbane jobs saved under a Morrison government deal to provide the country's last remaining oil refineries with a financial security blanket.
With just two oil refineries left in the country, including Ampol's Lytton facility in Brisbane, the new payment is designed to keep the struggling sector operating so Australia won't have to rely on other countries for the vital resource.
The payment, to be announced by Prime Minister Scott Morrison in Brisbane today (Monday), will act as a security blanket for the refineries, with the government stepping in with a maximum $1.8 cents per litre when times are rough - as they are now - with no cash for refineries when business is good.
Two of Australia's four oil refineries shut after demand for jet fuel crashed and consumption of petrol and diesel dropped due to the pandemic.
Up to 550 workers would be impacted in Queensland if Ampol's Lytton facility were to shut, not including the jobs indirectly impacted.
In a worst-case scenario where refineries struggle up to 2030 this "fuel security service payment", could cost taxpayers up to $2bn - though the government expects the sum to be less.
An further $50.7m has been set aside to pay for the implementation of this deal, which includes making sure refineries are keeping to their obligations of holding a minimum amount of stock of major transport fuels.
Mr Morrison said protecting the nation's fuel security would benefit all Australians, with modelling showing prices at the bowser would rise about 1 per cent per litre if both remaining oil refineries were to shut.
"This is a key plank of our plan to secure Australia's recovery from the pandemic, and to prepare against any future crises," he said.
"Major industries like agriculture, transport and mining, as well as mum and dad motorists, will have more certainty and can look forward to vehicle maintenance savings and greater choice of new vehicle models."
The fuel security package to be announced today also includes up to $302m in support for major upgrades to refinery infrastructure to help improve fuel quality earlier - a plan the government hopes will create 1750 extra construction jobs.
The government plans to introduce laws in coming weeks, with a goal to activate the payment to refineries by July this year.
Originally published as Oil refinery deal to save us from bowser price pain