Risk of shutting down national fuel security reserve

The existential threat that has enveloped Australia’s refineries due to the COVID-19 pandemic has put the Morrison government over a barrel, escalating pressure on it to step in immediately with a more generous assistance plan to save a sector critical for fuel security and local manufacturing.

The risk of closure goes beyond the two plants owned by listed companies, with the patience of multinationals ExxonMobil and BP to struggle on with their ageing and inefficient plants through a prolonged slump also expected to be growing thin.

For plants that have been hanging by a thread for years, the pandemic risks being the last straw, despite assistance in the wings through the federal government’s proposed $2.5 billion fuel security package.

“We’re getting close to the point where we need to start talking about the word ‘rescue’,” Daniel Walton, national secretary of the Australian Workers’ Union, told AFR Weekend, reflecting on Ampol’s advice on Thursday that is examining the closure of its Lytton refinery and the broader risks to the sector.

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