This is an article by AAP FactCheck
WHAT WAS CLAIMED
There are 89 days worth of oil stock in Australia.
OUR VERDICT
Misleading. At the time of the claim, Australia had 64 days of oil in the country. A further 25 days of stock were in transit or overseas.
Energy Minister Angus Taylor has attempted to quell public concern about rising fuel prices and global oil shortages by claiming the country has 89 days of oil stocks “here in Australia”.
The minister’s claim is misleading. Official data shows Australia had 64 days of oil imports on Australian soil in December 2021, the most recent month for which figures were available. A further 25 days of oil were either stored offshore for Australian use, on board vessels to the country or being prepared for shipment at the time.
Taylor made the claim during a March 9 interview on Sky News, during which he was questioned about rising petrol prices.
Asked about Australia’s strategic oil stocks, he replied: “We have 90 days – or 89 days – of stocks here in Australia, according to the definition we use, and that includes both crude oil and finished product” (video mark 1min 32sec – transcript here).
When contacted about the basis of the claim, a spokeswoman for Taylor told AAP FactCheck in an email: “Minister Taylor was referring to Australia’s emergency oil stocks we hold as part of our commitment to the IEA in accordance with the agreement of the International Energy Program … Minister Taylor went on to say ‘according to the definition we use’, which includes stock on water coming to Australia.”
Australia is a member country of the International Energy Agency (IEA), an organisation created in 1974 to co-ordinate a collective response to major disruptions to global oil supplies.
As part of its IEA membership, Australia is a signatory to the International Energy Program treaty, which requires IEA members to hold enough oil to sustain domestic consumption for 90 days in a national emergency (page 17).
The IEA publishes oil stock figures for each member country here, measured by days of net oil imports. That data shows Australia held the equivalent of 67 days of oil stock in December 2021 – the mo st recent data available at the time of writing – the lowest total of all 27 IEA countries listed.
Australia’s tally includes three days of stock held abroad. The IEA says stocks held under bilateral agreements can be counted towards the 90-day minimum requirement in some circumstances. In 2020, Australia reached an agreement to access part of the United States’ Strategic Petroleum Reserve to bolster domestic fuel security.
The only other country that was not compliant with the 90-day requirement was New Zealand with 87 days of stock, 34 of which were held abroad. In comparison, Japan had 219 days of stock while the UK had 905 days of stock. The IEA does not list oil stocks for some IEA members such as the United States, Canada, Mexico and Norway because they are net oil exporters.
The Australian government also publish es monthly petroleum statistics here. That data likewise confirms Australia had 67 days of net oil import coverage in December 2021 (see sheet: “Stock IEA days incl. on the way”).
The Australian government data also lists two other types of oil stock: oil onboard vessels destined for Australia (12 days of stock) and oil overseas waiting delivery to Australia (10 days of stock). The three categories total 89 days of cover from stock “held for the Australian market in Australia and overseas”.
According to the data notes, “stock that is onboard vessels or held overseas is not able to be included in meeting Australia’s IEA stockholding obligation”.
Taylor’s spokeswoman said the government “does not consider the current IEA methodology for counting stocks fair or representative of Austr alia’s unique geography compared to interconnected European countries”.
Tony Wood, energy and climate change program director at the Grattan Institute, told AAP FactCheck in an email that since Australia’s strategic oil reserve is held to meet our international IEA obligation, it “doesn’t matter where the product is physically held”.
However, it was “pretty questionable” to define overseas and on-water oil stocks as being ‘here in Australia’, Mr Wood said.
In 2019, Deakin University Law School professor Samantha Hepburn told AAP FactCheck that on-water supplies should not be counted towards Australia’s IEA oil stocks “because we don’t have full control of our fuel stocks on international waters until it is on our soil”.
“If you don’t have 90 d ays of reserves, excluding on-water stocks, Australia would be unable to contribute to the global response in the event of a fuel shortage and this would undermine global security,” she said at the time.
Australia has not complied with the IEA’s 90-day reserve requirement since 2012, according to a 2020 parliamentary research paper. The government says it is committed to returning to compliance with the stockholding obligation by 2026.
The Verdict
The most recent data at the time of Mr Taylor’s claim showed Australia had 64 days of oil reserves in Australia, with a further 25 days of stock either held offshore for Australian use, in transit to the country or overseas awaiting shipment.
It is therefore misleading to claim that Australia has 89 days of oil stock “here in Australia” when a significant portion of that stock is either stored offshore or is yet to arrive in the country.
Misleading – The claim is accurate in parts but information has also been presented incorrectly, out of context or omitted.
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