Australia’s fuel shock should be no surprise

Australia’s fuel crisis has triggered a familiar response: emergency coordination, reactive policy adjustments and renewed political attention. But the important question is why Australia still responds this way at all.

This week, Prime Minister Anthony Albanese convened National Cabinet and announced the establishment of a fuel supply taskforce within the Department of Prime Minister and Cabinet, describing the approach as ensuring Australia is ‘over-prepared’ for potential disruption.

The need for coordinated national fuel governance is not new. Australia’s Liquid Fuel Security, a 2013 report prepared by John Blackburn for NRMA Motoring and Services, identified the core problem. It warned that Australia’s growing dependence on imported refined fuels, declining domestic refining capacity and exposure to global supply chains created a structural vulnerability. More importantly, it argued that fuel security was not just a supply issue; it was a coordination problem. Australia lacked a central authority to manage allocation, prioritisation and distribution in times of disruption.

By 2023, the Defence Strategic Review reframed fuel as a critical national security vulnerability and pointed to the need for stronger whole-of-government coordination. Central to that discussion was the establishment of a national coordinating mechanism—widely understood as a National Fuel Council—bringing together Defence, energy, industry and logistics stakeholders.

Open-source information indicates that such a body was established in 2023. Defence material confirms that the council held its inaugural meeting in August that year, followed by a second meeting in October. Subsequent parliamentary references suggest that the council continues to operate under joint leadership from Defence and climate portfolios.

This should have addressed the coordination gap identified in Blackburn’s report and the Defence Strategic Review. Yet that coordination is not visible.

Instead, the government has moved to establish a new fuel supply taskforce to act as a central convening point, noting that measures have already been implemented including releasing 20 percent of reserves to address regional shortages, temporarily amending fuel standards to retain Australian-produced fuel onshore, and intervening on price gouging. The taskforce will provide ongoing updates on supply outlook and coordinate international engagement to secure fuel flows.

These are logical steps. In the absence of a visible coordination framework, escalation to National Cabinet and the creation of a central taskforce is inevitable.

But it also raises a more fundamental question about the existing system.

Responsibility for fuel security formally sits with the Department of Climate Change, Energy, the Environment and Water. The existence of a National Fuel Council suggests that a coordinating mechanism already operates at the senior level. Yet in practice, the current response has required the creation of a new structure within the Department of Prime Minister and Cabinet to perform that coordination function in real time.

This points to a structural disconnect.

The government’s framing of being ‘over-prepared’ reflects an intention to get ahead of potential disruption. But the need to stand up a taskforce during a crisis suggests that Australia is not operating from a pre-established, transparent coordination framework. Instead, it is building one in response to unfolding events.

Despite sufficient aggregate supply, localised shortages have emerged, particularly in regional Australia, where diesel disruptions are affecting agriculture, freight and mining. Governments are intervening to redirect flows and stabilise the system—but these decisions are being made in real time rather than guided by a national framework.

Australia has seen these dynamics before. During the Covid-19 pandemic, global supply-chain disruptions exposed how quickly fuel systems could come under pressure. That should have catalysed structural reform. Instead, policy responses have focused on supply buffers, including stockholding obligations and refinery support, rather than on how fuel is governed under stress.

The National Fuel Council was intended to fill that gap. But its role remains opaque. There is no public mandate, no published membership and no clear articulation of how it operates during a crisis. Its existence is acknowledged, but its function is not visible.

The creation of the fuel supply taskforce is therefore both necessary and revealing. It is a logical step, but one that appears to have come late. More importantly, it does not resolve the underlying issue of how national fuel coordination will operate beyond the immediate crisis.

Fuel security is not just about how much supply Australia holds; it is about how that supply is prioritised, allocated and distributed when the system is under stress. That requires clear authority, defined processes and transparency across government and industry. It requires coordination mechanisms that are visible and operational before a crisis, not constructed during one.

The Defence Strategic Review made clear that Australia’s strategic environment would be characterised by contested supply chains and increasing disruption risk. Fuel sits at the centre of that system, underpinning military operations, economic activity and societal functioning. If coordination mechanisms are not embedded and understood in advance, they will not function effectively when tested.

Blackburn’s 2013 NRMA report, the Covid-19 shock and the 2023 Defence Strategic Review each pointed to the same conclusion: fuel vulnerability is a coordination problem as much as a supply problem. The current crisis confirms that lesson.

The government has now taken steps to centralise coordination through the fuel supply taskforce. The question moving forward is whether this becomes the foundation of a transparent and enduring national framework, or whether it remains a temporary response layered over an opaque system.

This article was published by The Strategist.