China Agrees to Supply Australia Over 600,000 Barrels of Jet Fuel

Australia has secured three shipments of aviation fuel totaling more than 600,000 barrels from China and is pursuing negotiations with more neighboring countries for fuel supply, the Australian government said Tuesday.

"The three cargoes of jet fuel from China are expected to arrive from early June, and are in addition to the 600,000 barrels or about 100 million liters of jet fuel already secured through the Fuel and Fertilizer Security Facility", said a statement published by the office of Prime Minister Anthony Albanese.

"These cargoes from China are a first step and we are working to ensure there will be more to come, to keep our aircraft flying, including to rural and regional areas".

The shipments were agreed after discussions that involved Albanese and Chinese Premier Li Qiang, the statement said.

The statement added Australia has also secured 38,500 metric tons of agriculture-grade urea from Brunei. The additional imports bring fertilizer secured under the newly launched Fuel and Fertilizer Security Facility to about 125,000 metric tons, in addition to 250,000 metric tons secured from Indonesia in partnership with Incitec Pivot Pty Ltd, according to Tuesday's statement.

"The additional jet fuel will support travel to Australia's world-class tourist destinations and support the movement of freight within Australia and exports overseas", said Trade and Tourism Minister Don Farrell.

"The fertilizer we have secured will support Australian farmers to produce the agricultural exports that we sell to the world, helping grow our economy and maintain our reputation as a supplier of world-class exports".

Foreign Affairs Minister Penny Wong said, "Australia is working with countries in our region to respond to this unprecedented shock to the global economy and ensure the continued flow of essential fuels. The Albanese Government is focused on securing the supplies - including diesel, jet fuel, petrol and fertilizer - that Australia needs.”

The AUD 7.5-billion ($5.34 billion) Fuel and Fertilizer Security Facility is part of the Australian Fuel Security and Resilience package announced May 6. The broader package, inserted into the federal budget, totals over AUD 10 billion.

The Fuel and Fertilizer Security Facility provides "loans, equity, guarantees, insurance and price support", according to an official statement.

A 3.2-billion portion of the broader package will fund the establishment of a government-owned Australian Fuel Security Reserve of around 1 billion liters of long-term diesel and aviation fuel supply.

Concurrently the Minimum Stockholding Obligation, imposed on refiners and fuel importers, would be raised by 10 days for every fuel type. This change will be supported with AUD 34.7 million over 4 years, the government said.

An additional AUD 10 million from the broader package will "support feasibility studies into new or expanded fuel refining capabilities, to be co-funded with state and territory jurisdictions", the government said.

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