Australia underwrites fuel shipments from Asia to avert shortages

Australia has begun intervening in fuel markets as global energy disruptions push prices higher, with the government underwriting emergency diesel imports to secure supply.

Prime Minister Anthony Albanese announced that the government has backed the first of two diesel shipments at elevated prices. The cargo, arranged by Viva Energy, includes more than 570,000 barrels sourced from Brunei and South Korea.

Speaking at a press conference in Kuala Lumpur alongside Malaysian Prime Minister Anwar Ibrahim, Albanese said the delivery marks “the first of many expected shipments” under newly activated strategic reserve powers.

The move follows a policy announced last week allowing the government to underwrite fuel import contracts that may not be commercially viable due to price volatility. The arrangement was initially agreed with Australia’s two main refinery operators, Viva Energy and Ampol, and has since been extended to smaller suppliers, including Park Fuels and IOR.

The mechanism is designed to ensure continuity of supply even as global markets tighten and import costs rise sharply. By absorbing part of the financial risk, the government aims to prevent disruptions that could affect transport, industry and essential services.

Australia currently has enough contracted fuel to meet demand into May. However, officials are increasingly concerned about supply availability beyond that point, particularly if global disruptions persist or intensify.

By Tamilla Hasanova