Image: Peter Malinauskas/Facebook
The state government has secured a strategic reserve of up to 20 million litres of diesel to boost South Australia’s fuel security and support the state’s primary production sector.
The government has reached a commercial agreement with Australian bulk fuel supplier IOR to source and store the reserve at IOR’s existing storage facility at Port Bonython in the Upper Spencer Gulf.
Under the agreement, the Government will immediately purchase and store ten million litres of diesel, with an option to increase that reserve to up to 20 million litres. The arrangement also allows the State to further source and refill the storage if needed.
The move has been designed as an additional buffer for South Australia at a time of ongoing global uncertainty, rather than a replacement for national fuel security measures or a direct intervention in the broader fuel market.
According to the State Government, the Port Bonython facility already has spare capacity to hold the reserve, with the plan adding to supply from Singapore rather than redirecting fuel from other sources.
Premier Peter Malinauskas said the reserve was about giving confidence to sectors that rely heavily on diesel, particularly South Australia’s primary producers.
“This strategic diesel reserve will help build confidence for South Australia’s primary producers as we confront the international fuel crisis,” he said.
“While diesel continues to arrive on our shores, and the Commonwealth has committed to a $10 billion plan to ensure Australia’s long-term fuel security, it is prudent that we invest in our own reserve to provide a buffer in the case of unforeseen events.”
The reserve is intended to complement the Australian Government’s more than $10 billion Australian Fuel Security and Resilience package, which is set to establish a permanent government-owned reserve of more than a billion litres and help ensure at least 50 days of fuel supply and storage for diesel and aviation fuel.
While petrol, diesel and jet fuel are continuing to arrive in South Australia in significant volumes, the State Government says the reserve would be ready to be directed quickly to areas of need in line with the National Fuel Security Plan if supply deteriorates.
Treasurer and Minister for Energy and Mining Tom Koutsantonis said negotiations with IOR began in March and the agreement would help strengthen South Australia’s resilience.
“This is a practical step to strengthen South Australia’s fuel security at a time when global supply chains remain uncertain,” he said.
“While the Commonwealth continues to lead on national fuel security, we are making sure South Australia is well positioned to manage any potential disruptions without competing against our primary producers.”
IOR CEO Drew Morland said the agreement showed how government and industry could work together on targeted fuel security solutions.
“The strategic location of Port Bonython is significant not only for South Australia but for national fuel security. It supports key industries across the Upper Spencer Gulf and Eyre Peninsula, including agriculture, as well as the mining sector that helps power the Australian economy,” he said.
The diesel reserve follows the State Government’s earlier strategic gas reserve agreement with Santos, which will see 20 petajoules of gas supplied each year for 10 years from 2030.
