Australian Energy Minister Chris Bowen will travel to Saudi Arabia next week to meet with Energy Minister Prince Abdulaziz Al Saud as the government works to secure supply amid rising global oil prices.
Bowen told the ABC’s 7.30 program that the government has 3.3 billion litres locked in for delivery over the next month, along with 41 days’ worth held domestically. He said the personal meeting with the prince would be key to getting the best information about managing supply risks in the coming weeks and months.
The latest Australian Competition and Consumer Commission fuel price report shows prices have risen, reflecting higher global oil prices and the end of the government’s temporary excise cut in August.
The Saudi context
Saudi Arabia is one of the world’s largest exporters and a central player in OPEC decisions about production levels. Bilateral energy diplomacy reflects the country’s dependence on imported liquid fuel for much of its needs.
Australia has been managing supply concerns since the escalation of the U.S.-Iran conflict in February tightened global oil markets. The Persian Gulf is a critical transit route for a significant portion of global oil shipments, and disruptions to that route or to Saudi export capacity have direct implications for import-dependent countries in the Asia-Pacific.
The domestic price situation
The ACCC report tracks retail prices across Australian cities and regions. A combination of higher crude input costs and the removal of the temporary excise relief that was in place until August has pushed retail prices higher.
Excise is the tax applied to transport fuels at the pump. The temporary cut that ended in August had partially offset global increases during the period it was in force. With that relief ended, the full impact of higher international prices is being passed through to retail customers.
What the trip aims to achieve
Bowen framed the visit as an information-gathering exercise as well as a supply-security conversation. He said hearing directly from Prince Abdulaziz is the goal.
Australia does not have formal strategic reserves of the scale that the United States or some European nations maintain. The 41-day domestic reserve is the metric Bowen cited as the current buffer.
