Refinery closures do reduce transport fuel security

Closure of Australian refineries does have implications for security of transport fuel supply.Yesterday BP announced the closure of Brisbane’s Bulwer Island refinery from 2015. The general commentary has been that this won’t affect Australian transport fuel security because most crude oil refined in Australia is imported. However the crude oil processed in Australian refineries is sourced from around 10 countries, mostly in the Asia Pacific region and Africa. Imports of refined products however are mostly from just two countries, Singapore and South Korea, with some also from Japan and Taiwan. The closure of refineries is narrowing Australia’s transport fuel supply sources. One means of enhancing supply security is by increasing petroleum stocks. (The US has  a strategic reserve.) Countries that are members of the International Energy Agency (including Australia) are supposed to hold a minimum of 90 day’s fuel stocks. However according to BREE’s Australian Petroleum Statistics, Australia had 47 days coverage at the end of January 2014 and has never had more than 60 days coverage in recent times.