Australia’s recent fuel disruption exposed pricing pressures and logistics challenges rather than a true shortage of supply, according to speakers at the National Bulk Tanker Association’s Bulk Tanker Day panel discussion.
The ‘Fuel Supply in Focus’ panel brought together fuel distributors, logistics operators and industry representatives to discuss the impacts of recent market volatility on regional supply chains, transport operators and customers.
Australasian Convenience and Petroleum Marketers Association CEO, Rowan Lee, said the issue facing the industry was never primarily about supply.
“It was never going to be really a supply issue,” he said.
“It was always going to be a price issue. We are getting in a global market for a commodity.”
Lee said suppliers quickly adapted to changing international conditions by sourcing fuel from new locations including Argentina and the Gulf of Mexico, despite significantly longer shipping times and higher freight costs.
“The industry moved very quickly,” he said.
“The issue when I say about prices, instead of taking 10-14 days to bring fuel out of Singapore, bringing it in from the Gulf of America is about six weeks.”
Regional fuel operators described how panic buying and forward purchasing placed major strain on distribution networks during the disruption.
Endeavour Group Managing Director, Jeff Griffiths, compared the response to the panic buying seen during the Covid-19 pandemic.
“The moment that the perceived shortages occurred, we had a 30 per cent increase in the average site,” he said.
“Our bigger sites jumped to 50 per cent.”
Griffiths said some locations saw four days of fuel sales compressed into just two days, creating major scheduling and delivery challenges for tanker fleets.
“The issue became logistics,” he said.
“We had sites running out because the tanks just didn’t have the capacity.”
Operators also reported increased demand for bulk fuel storage from customers across agriculture and regional industries.
Simpsons Fuels Operations Manager, Haydn Simpson, said media coverage contributed to customer anxiety despite supply remaining available.
“The media really hurt us,” he said.
“The customer was hearing something different to what the reality was on the ground.”
Simpson said his business focused heavily on communication to reassure customers that supply would continue.
“We put on a big effort communicating to customers that supply’s okay,” he said.
Panelists said rural customers, particularly during sowing season, were highly exposed to disruptions due to their position at the end of the fuel supply chain.
“Fuel is critical,” said Riordan Fuels General Manager, Brent Squires.
“You need to have fuel to make food.”
The discussion also highlighted growing interest in additional fuel storage infrastructure across Australia.
Griffiths said his company has continued investing in regional fuel depots to improve supply security.
“We’re building back what’s being taken away,” he said.
“We’re definitely concentrating on diesel.”
Panelists broadly agreed that Australia needs increased domestic fuel storage and greater investment in supply resilience.
“We need to get to that point of having 90 days’ worth of fuel storage in Australia,” Squires said.
“But we do need to seek more refining capacity in Australia.”
