Grain Producers SA (GPSA) has welcomed the recent announcement by the state government to establish a strategic fuel reserve for the state focusing on primary producers, describing it as an important safeguard to help keep the grain industry moving during major supply disruptions.
Chief executive officer Brad Perry said the announcement was a positive and proactive step amid growing global uncertainty and increasing concerns around Australia’s reliance on imported fuel supplies.
“South Australian grain producers rely heavily on diesel during seeding and harvest, as well as during the growing season and when growers need fuel, they simply can’t afford to wait,” he said.
“Any major disruption to fuel supply can have immediate consequences for food production and livelihoods, with flow-on effects down the supply chain to freight and regional economies.
“Recent global conflict and instability have highlighted just how vulnerable Australia remains due to our heavy reliance on imported fuel and international shipping routes.”
The state government has reached a commercial agreement with bulk fuel supplier IOR to source and store the state’s diesel reserve using spare capacity at IOR’s existing storage facility at Port Bonython, near Whyalla.
The government will purchase and store 10 million litres of diesel immediately, with an option to secure and store up to 20 million litres, plus an ability to further source and refill this storage if the state elects.
Premier Peter Malinauskas said the strategic diesel reserve would help build confidence for South Australia’s primary producers amid the international fuel crisis.
“While that package will see the establishment of a permanent government-owned reserve of more than a billion litres and ensure at least 50 days of fuel supply and storage of diesel and aviation fuel, the South Australian fuel reserve will provide an additional buffer if supply deteriorates in the immediate term and while the impacts from the Middle East conflict remain uncertain,” he said.
“While diesel continues to arrive on our shores, and the Commonwealth has committed to a $10 billion plan to ensure Australia’s long-term fuel security, it is prudent that we invest in our own reserve to provide a buffer in the case of unforeseen events.
“Importantly, this has been done in a coordinated and thoughtful manner to ensure we are not competing against the Commonwealth, or our farmers to purchase fuel.”
Mr Perry said GPSA had been actively raising feedback from South Australian grain producers about diesel supply, distribution and pricing with both state and federal governments.
“A strategic fuel reserve provides an important backup option in the event of a major emergency or significant supply chain disruption and helps provide confidence that essential industries can continue operating while additional fuel is sourced.”
Mr Perry added GPSA continued to advocate for a minimum 90-day onshore fuel reserve in Australia to better protect national food and energy security.
“As a nation with a highly export-focused agricultural sector, the recent Iran conflict has shown that Australia cannot afford to remain heavily exposed to global fuel supply shocks,” he said.
“We need stronger long-term fuel security planning nationally, including increased onshore fuel storage capacity and more resilient domestic supply chains.”
Mr Perry said GPSA would continue to work constructively with the state government through weekly fuel security meetings and raise issues on behalf of grain producers.
“South Australian grain producers understand the importance of planning ahead and this strategic fuel reserve announcement is a positive step in that direction.”
