Strengthening Australia’s Fuel Security and Resilience

Response to DCCEEW Consultation Paper

September 2026

Executive summary

About NatRoad

The National Road Transport Association (NatRoad) is Australia’s largest national representative of the road freight transport industry. NatRoad is informed by members from owner-drivers to large fleet operators, general freight, road trains, livestock, tippers, express, car carriers, as well as tankers and refrigerated operators. Our vision is to improve the operating environment for Australia’s $96 billion road freight transport industry.

Introduction

NatRoad welcomes the Department of Climate Change, Energy, the Environment and Water’s Consultation Paper,
Strengthening Australia’s Fuel Security and Resilience (the Paper), and recognition that Australia must strengthen fuel supply and reserves in a more uncertain and disruption-prone environment.

Diesel is our most important and versatile fuel.¹

Question 5. What are the benefits, risks, feasibility and impacts of the proposed approach to zone boundaries and minimum stocks per zone; and would you draw the boundaries or set the amounts differently?

Minimum stocks per zone

Subject to drawing the zones appropriately, the proposed minimum holding in each zone, with the balance able to be stored in any zone, appears sound in principle. If the number of zones changes, the 15% minimum in Table 1 would need to be reassessed⁵.

Drawing the zonal boundaries

Government should release the evidence and assumptions for the proposed zone boundaries, and any alternative
options that were considered (i.e. alternatives to the zones mapped at Fig 3 (p.9)).

The reserve zones, locations and boundaries should be based on consideration of:

Logistics and supply-chain needs, including road
transport’s need for reliable diesel supply throughout
Australia.

• Key freight routes, the locations of road transport businesses, and where trucks need to refuel.
• Current and future fuel storage locations, capacities, expansion potential and facility life, including for
  facilities outside capital cities and their surrounds.
• How cyclones, floods, fires and other disaster risks affect facility resilience, zoning, storage and fuel
  movement.
• Alternative access arrangements, such as supplying Alice Springs from Adelaide or Port Augusta if the
  Darwin–Alice Springs rail corridor is unavailable.
• How military, security and border considerations, including the ADF’s fuel needs and contingencies,
  should inform the zoning of fuel reserve holdings.
• How to address regional and remote vulnerability where storage capacity is limited or supply chains are
  long and constrained.
• Whether zones may be able to cross state and territory borders, and alternatives to the proposed boundaries in Figure 3 of the Paper.
• Remote resource-sector fuel needs, and any potential additional storage capacity or logistics the resource
  sector may be able to provide if necessary (e.g. remote fuel storage, railways, ports etc).
• Remote communities that rely on diesel for power.⁶

Government should review the proposed NW and NE zones, consider the alternative of a single wider Northern
Australia Zone centred on Darwin with satellite reserves across northern Australia and crossing WA, NT and
Queensland borders.

Options for such a northern fuel zone, as an alternative to the four-zone model, might start with consultation with bodies representing and servicing Northern Australia and with the road transport sector, both operators based in the North, and those servicing the North. Specific considerations may include:

• Adopting the definition of Northern Australia in s 5 of the Northern Australia Infrastructure Facility Act 2016 (Cth), excluding its offshore application.
• Combining the NW and NE zones, for example by using the 26th parallel south, or another suitable
  latitude, as a cross-continent zonal boundary.
• Reviewing the location and fuel supply arrangements of communities, population centres, industries and regions in the North, including (for example) recognising differences between Charleville, which sources fuel from Lytton, and Mackay, which relies on fuel imports through its port.

Question 6. Should the AFSR provide for some stocks to be held offshore (inside or outside Australia’s Exclusive Economic Zone)?

The AFSR should focus on onshore reserves to protect sovereignty, national security and fuel supply in future crises. Any offshore component should be considered only if Government can guarantee that:

• The overwhelming majority of reserves will remain onshore.
• Onshore reserves will be sufficient to meet projected emergency needs.

Australian-controlled shipping will be able to rapidly bring offshore stocks onshore.

• Storage, logistics and road transport capacity can receive and distribute fuel brought onshore rapidly
  and reliably.
• The road transport sector has sufficient diesel to distribute fuel brought onshore.
• Host countries would release fuel to Australia even during their own fuel crises.

Emergency Release

Question 7. What are the key benefits, risks, impacts and implementation challenges associated with the emergency release approach; including the proposed criteria for
general and targeted emergency release and obligations on registered off-takers?

Fuel reserve release arrangements must be rapid, reliable, flexible and planned for in advance to the extent possible. They should allow general releases, nationally or across multiple zones, and targeted releases for local shortages, regional distribution constraints and localised emergencies such as floods, cyclones or fires.

On that basis, NatRoad broadly supports the Paper’s two-tier release model.

In implementing emergency release arrangements, Government should:

Prioritise road transport as an essential fuel user and
emergency response facilitator.

• Prioritise fuel supply to road transport during both immediate emergencies and throughout recovery and
  rebuilding.
• Avoid fuel-price distortions or off-taker obligations that impose additional costs on road transport.
• Ensure each release reflects the emergency demand, supply position and freight task.
• Recognise that critical freight services may be based outside affected regions, and that access to diesel in
  major centres may best support remote and regional Australia during emergencies.
• Plan for contingencies that make regional storage, roads, rail or other infrastructure inaccessible.
• Facilitate and support fuel swaps across zones and between suppliers.

NatRoad supports Ministerial discretion to authorise rapid emergency release. Arrangements should be pre-planned and scenario-tested with industry to the extent possible and avoid prescriptive or bureaucratic requirements that risk delaying essential access to fuel / inflexibility when responsiveness is most needed.

Off-takers

Criteria for mandatory off-taker registration should be clear, including whether road transport companies are
captured.

• If road transport companies are required to register, Government should co-design practical, sustainable
  and well-understood arrangements with NatRoad.
• Scheme design should clarify whether road transport companies may voluntarily opt in as off-takers and
  consider incentives to do so.

Emergency release, fuel holding, and redistribution obligations

The Paper proposes that off-takers be able to take possession of, redistribute or supply fuel from an AFSR provider under a targeted emergency release within 72 hours.

NatRoad supports rapid supply to priority fuel users, particularly road transport operators, and looks forward to
working with Government to deliver a practical, balanced and accessible release model.

However, the 72-hour target needs flexibility when required. Distribution distances, logistics and emergency
impacts will vary, and affected roads, storage facilities and access routes may be unavailable.

Question 8. Should there be a presumption that government will reduce or suspend the MSO first? What conditions or criteria should apply to determining the order of releasing
MSO and AFSR stocks?

NatRoad does not support a presumption that MSO stocks should be reduced or suspended before AFSR release.

Drawing down MSO stocks first may deplete commercial fuel relied on by road transport operators before Government reserves are accessed, increasing supply constraints, cost inflation, market distortions and price
impacts when fuel is most needed.

The Paper does not explain why an MSO-first approach would be pursued or engage with alternatives, such as
drawing on the AFSR first or using balanced, simultaneous drawdown.

Relevant considerations appear to include:

• The purpose of the AFSR as an emergency reserve, to be accessed in emergencies.
• The value of models that would be more nuanced than exhausting one reserve before accessing another, with risks and costs shared rather than imposed disproportionately on road transport or other users.
• Different emergencies potentially warranting different drawdown arrangements.
• Ensuring release criteria are transparent, flexible, and balanced to ensure commercial diesel stocks are not
  unduly depleted before Government reserves are accessed.
• Clear triggers should allow graduated, scaled or combined drawdowns to keep freight moving, support
  emergency response and maintain balanced, diversified and decentralised reserves.

Options for drawdown arrangements may include:

• Ministerial discretion on which reserve to draw from, perhaps subject to an obligation to consult with the
  proposed Advisory Board / an emergency committee prior to making a determination.
• Drawing from one reserve to a pre-determined threshold, then switching fully or partly to the other if
  emergency demand persists.
• Drawing concurrently from both reserves using predetermined percentages or ratios, such as 50:50 or
  60:40.
• A transitional approach before 2030 while reserves are built, with any use informing the ongoing release
  model.
• A combination of approaches, such as drawing from one source to a predetermined limit, then from both.

Resupply and restocking

Restoring reserves that are drawn down must also be considered at this stage of system design.

AFSR drawdowns may require new procurement and reserve rebuilding, while MSO drawdowns may require
further industry uplift.

Government should meet restocking costs rather than impose them on road transport operators or other fuel users.

It should not be the case that Government would direct the use of fuel reserves, then the private sector would be
expected to re-stock them, which would see costs flow on to road transport operators.

Minimum Stockholding Obligation (MSO)

NatRoad supports a stronger MSO as part of wider fuel security measures, aligned with a broader target of up to
90 days of national fuel cover.

MSO Uplift phasing

Question 9. Noting the government’s preference for achieving the fastest
feasible uplift, which phasing option is most appropriate for implementing
the additional 10-day MSO uplift, and why? In your response, please indicate whether your preferred approach differs by fuel type (petrol, diesel and jet fuel)?

MSO uplift must be practical, balanced and designed to avoid or fairly distribute impacts on fuel users, particularly road transport operators.

MSO uplift should avoid short-term price spikes and sustained structural fuel price increases.

Care should be taken to ensure higher stockholding does not increase storage and capital costs or reduce fuel
availability to key users.

As a national fuel security measure, reserve uplift should be financially supported by Government without imposing costs on the road transport industry.

National fuel security costs should be met by Government, not passed through to road transport operators.

While Government’s preference for rapid uplift is understandable:

• Overly rapid uplift could raise costs faster and create storage bottlenecks while AFSR stocks are built.
• Any rapid uplift should not lead to negative price or supply impacts for road transport operators.
• Rapid uplift is likely to require larger and more concentrated Government investment to avoid
  unintended consequences.

There should also be:

• Detailed modelling and evaluation of different MSO uplift options, including measures to minimise price
  increases, storage constraints and supply disruption.
• Transparency and regular performance reporting throughout MSO uplift, including identifying any
  impacts on pricing and fuel availability.
• Active consultation with industry preceding and throughout any uplift process.

Subject to modelling and further consultation, NatRoad sees merit in gradual uplift, such as Option 2 in Table 3 of
the Paper [4 days, then 6 days, then 10 days], with scheduled review points across the phasing period.

NatRoad would like to work with Government, refiners and importers to support the MSO uplift and minimise risks of any negative impacts.

Question 10. What costs, operational impacts, storage infrastructure considerations or other implementation considerations would arise under each phasing option?

Costs will arise from holding more fuel out of sale, expanding storage and stockpiling higher volumes.

Without sound and well informed design of any uplift, these costs are likely to flow through to fuel markets, regional prices, pump prices, bulk contracts, pre-purchase arrangements and other supply arrangements, increasing costs for road transport and the communities and industries it serves.

Foreseeable costs should be modelled, researched, reported and consulted on before any MSO uplift model is
adopted. Government should also review international experience in increasing fuel reserves, including market
impacts and mitigation measures.

If MSO uplift is pursued for national security and resilience, Government should meet the costs and invest to minimise impacts on refiners, importers and key fuel users, including road transport. NatRoad notes Government’s existing investment in the Boosting Australia’s Diesel Storage Program through grants and matched funding in support of this approach.

Storage Co-investment

Some road transport operators already store diesel, or could be encouraged to develop, upgrade or expand
storage on suitable land near population centres and logistics infrastructure.

Government should assess whether private transport operators could hold increased fuel stocks, and how best
to encourage and support this.

Private road transport operators could be made eligible for co-investment or incentives to expand fuel storage,
including land purchases and storage expansion, replacement or refit.

Consideration could be given to:

• Expanding the role of road transport operators in holding diesel stocks, including at depots where
  practical.
• Expanding or broadening the Boosting Australia’s Diesel Storage Program.
• Measures available to the Australian Government to fast-track planning and approvals for new and
  expanded fuel storage, including through National Cabinet and intergovernmental cooperation.

Data-informed investment / strategy

Government will need to identify where storage can best be built, expanded, refitted or fuel-types diversified to
meet an expanded MSO.

A first step may be to confirm whether existing datasets, such as Geoscience Australia’s National Liquid Fuel Facilities MapServer, capture diesel held by private road transport operators and can support future private storage planning, or whether additional data or research is necessary.

Refining Capacity

Question 14. What evidence should government consider as we analyse the benefits, risks, costs, feasibility, effectiveness and impacts of options to support refinery retention and expand eligibility in the decade beyond 2030?

Question 15. What framework would provide the best incentives for efficient investment and protect the public interest, while minimising complexity?

NatRoad strongly supports retaining and, where viable, expanding Australia’s onshore refining capacity. Domestic
refining is critical to our diesel security, fuel resilience and the longer term viability and effectiveness of the AFSR and MSO.

Government should assess evidence, compare policy options and adopt settings that support investment in
refining. This should encompass:

• Engaging existing and prospective refiners and investors on policies and incentives that will support investment in Australian refining.
• Seeking advice from independent fuel-sector, investment and infrastructure experts, including global fuel analysts, investors and infrastructure funds.
• Commissioning independent modelling on risks, costs, incentives and investment preconditions.
• Reviewing international approaches to retaining or expanding fuel supply and refining capacity and
  identifying relevant policies and approaches for Australia.

Expansion

The Paper emphasises retaining existing refining capacity. The Government should also consider whether expanding refining capacity would strengthen long-term fuel security, diversify supply and improve resilience and crisis responsiveness.

Coordinating measures

Support for refining should be coordinated with other existing programs and initiatives, including the Fuel Security Services Payment for Geelong and Lytton. Post2030 funding certainty is needed for the FSSP to support
sovereign onshore refining capacity, investor confidence and the effectiveness of the AFSR and MSO.

The Refinery Upgrades Program appears differently purposed, to reduce sulphur and aromatics. Refining
support should be coordinated across all such programs, with clear messaging to refiners on priorities and
expectations.

Western Australia and Queensland

Additional WA-based refining capacity could diversify Australia’s refining geography, strengthen resilience and
better support western and northern supply chains. Government should continue to actively consider measures
to support WA refining capacity.⁷

Queensland’s May 2026 Accelerating Fuel Infrastructure Program, which proposes releasing state-owned land for
storage and potential refineries, should also be considered.⁸

Exports

Government should also consider the extent to which Australian refineries could export fuel, including to Pacific
markets, without compromising domestic fuel security or Pacific energy transition policies.

Other Considerations

AdBlue, base oil and lubricants

Recent geopolitical and supply-chain disruptions highlight the need to secure all essential road transport inputs, in addition to the supply of diesel, including:

• AdBlue / technical grade urea: The TGU Strategic Stockpile Panel is a critical initiative, strongly supported by the road transport industry. Government should clarify how AFSR and MSO support for access to additives will be coordinated and made resilient to future challenges.
• Base oil and lubricants: Government should also address how Australia will secure sufficient base oil supply to maintain onshore lubricant production, complement imports and, if necessary, substitute for them in future crises. There should be consideration of measures to ensure resilient supply / reserves of
  lubricants, as there are fuels and additives.

International fuel release

Any Australian contribution to IEA multilateral fuel release should be Government-funded, subject to industry
consultation, and drawn from the AFSR rather than MSO. It should be considered only where Australia’s domestic
supply for road transport and local communities is secure and reliable.

Government should also clarify whether the AFSR could be used to support fuel security in our region, such as for a major fuel infrastructure outage in the Pacific. Any offshore use of Australia’s reserves should not compromise
domestic fuel security, road transport’s diesel access or emergency reserve obligations, and should be
Government-funded from the AFSR rather than MSO.

Contact:

1800 272 144
[email protected]

1. www.dcceew.gov.au/energy/security/australias-fuel-security#toc_6 ↩︎
2. www.fuelplan.gov.au/resources/national-fuel-security-plan ↩︎
3. www.natroad.com.au/decarbonisation/ ↩︎
4. www.natroad.com.au/stronger-economy-lower-emissions/ ↩︎
5. This responds to Section 2.4 of the Consultation Paper, the map at Fig 3 (p.9) and Table 1 on AFSR volumes (p.8) ↩︎
6. ABS News Online “Diesel-reliant remote communities left vulnerable amid Iran conflict”, 24 March 2026, see also
   www.infrastructureaustralia.gov.au/ipl/northern-territory-remote-community-power-generation-program ↩︎
7. www.perdamanchemicalsandfertilisers.com/perdaman-refinery-project-in-western-australia/ ↩︎
8. www.statements.qld.gov.au/105012 ↩︎