This package was designed to support Australia's two remaining oil refineries (Ampol's Lytton refinery in Queensland and Viva Energy's Geelong refinery in Victoria) through the Fuel Security Services Payment (FSSP), which commenced on 1 July 2021 [2][3].
The specific structure of the package included:
- Up to $2.047 billion in Fuel Security Services Payment subsidies through to 2030 [4]
- Up to $302 million for refinery infrastructure upgrades [1]
- $50.7 million to implement stock holding obligations [1]
- Total potential cost: approximately $2.39 billion [1]
However, the claim about "1 cent per litre savings" requires careful unpacking.
According to the 2019 Liquid Fuel Security Review, if all of Australia's remaining refineries closed, international prices would increase by approximately 0.8 cents per litre due to reduced regional refining capacity [5].
According to The New Daily's analysis, the production subsidies were worth up to 1.8 cents per litre "when profit margins are low, decreasing to zero when margins exceed $10.20" [1].
根据 gēn jù 《 《 The The New New Daily Daily 》 》 的 de 分析 fēn xī , , 生产 shēng chǎn 补贴 bǔ tiē 在 zài " " 利润 lì rùn margins margins 低时 dī shí " " 价值 jià zhí 高达 gāo dá 每升 měi shēng 1.8 1.8 澳分 ào fēn , , " " 当 dāng margins margins 超过 chāo guò 10.20 10.20 澳元 ào yuán 时 shí 递减 dì jiǎn 至 zhì 零 líng " " [ [ 1 1 ] ] 。 。
The maximum subsidy would only be paid approximately 30% of the time, and no subsidy would be paid about 45% of the time [1].
Australia would run out of domestically-refined petrol within a month if global supply chains ground to a halt, according to government figures from 2019 [6].
While some experts (including ACCC Chair Rod Sims) expressed concern that subsidizing domestic refineries could disadvantage cheaper international importers and potentially increase prices, others like Tony Wood from the Grattan Institute noted it was hard to determine the actual price impact and said "it would be a 'long bow' to suggest importers will behave less competitively" [1].
Alternative Policy Options Considered:**
The government initially considered funding subsidies through an industry levy (tax) but scrapped that plan because it would have had a larger impact on bowser prices than the direct subsidy model [1].
Actual Consumer Impact Remains Uncertain:**
The New Daily article explicitly states "experts said the plan...won't make petrol any cheaper and could even boost prices by disadvantaging cheaper imported product" [1].
原始 yuán shǐ 来源 lái yuán 是 shì 《 《 The The New New Daily Daily 》 》 , , 这是 zhè shì 一个 yí gè 成立 chéng lì 于 yú 2014 2014 年 nián 的 de 左翼 zuǒ yì 数字 shù zì 新闻 xīn wén 机构 jī gòu [ [ 7 7 ] ] 。 。
The original source is The New Daily, a left-leaning digital news outlet founded in 2014 [7].
虽然 suī rán 它 tā 确实 què shí 报道 bào dào 主流 zhǔ liú 新闻 xīn wén , , 但 dàn 具有 jù yǒu 进步 jìn bù / / 工党 gōng dǎng 倾向 qīng xiàng 的 de 编辑 biān jí 视角 shì jiǎo 。 。
While it does report mainstream news, it has a progressive/Labor-aligned editorial perspective.
Matthew Matthew Elmas Elmas 的 de 文章 wén zhāng 包括 bāo kuò 来自 lái zì 多个 duō gè 专家 zhuān jiā 来源 lái yuán 的 de 评论 píng lùn , , 包括 bāo kuò The The Australia Australia Institute Institute ( ( 一个 yí gè 进步 jìn bù 智库 zhì kù ) ) 、 、 Grattan Grattan Institute Institute 和 hé ACCC ACCC [ [ 1 1 ] ] 。 。
The article by Matthew Elmas includes commentary from multiple expert sources including The Australia Institute (a progressive think tank), the Grattan Institute, and the ACCC [1].
**Credibility Assessment:**
- The New Daily is a legitimate news organization with professional editorial standards
- The article cites authoritative sources (ACCC, Grattan Institute, government statements)
- However, the article's framing emphasizes criticisms ("Absurd," "could rise") rather than balanced presentation of trade-offs
- The article itself acknowledges that some experts (like Tony Wood) are less certain about price impacts
- The outlet's progressive alignment means it predictably emphasizes criticisms of Coalition policies
The article is factually accurate in its reporting of the subsidy amounts and expert views, but its framing is selectively critical rather than truly balanced.
**Did Labor do something similar?**
Search conducted: "Labor government fuel security refineries Australia policy"
Labor has not implemented an equivalent fuel security subsidy program for oil refineries during the periods available for comparison.
* * * *
The Fuel Security Services Payment is the Coalition's primary recent policy in this area.
However, there are relevant Labor policies to compare:
- Labor's energy policy emphasizes renewable energy and climate action rather than fossil fuel subsidies [8]
- The Albanese Labor government (which took office in 2022 after this subsidy was implemented) has not extended the FSSP but also has not immediately terminated it, suggesting bipartisan concern about fuel security [9]
- Both major parties have shown concern about fuel security, but Labor has pursued this through different mechanisms (emphasis on renewable energy, electric vehicles, fuel reserves)
**Comparison:** This appears to be a Coalition-specific policy approach to fuel security.
在 zài 可 kě 比较 bǐ jiào 的 de 时期 shí qī 内 nèi , , 工党 gōng dǎng 没有 méi yǒu 实施 shí shī 过 guò 同等 tóng děng 的 de 炼油厂 liàn yóu chǎng 燃料 rán liào 安全 ān quán 补贴 bǔ tiē 计划 jì huà 。 。
Labor's approach has emphasized demand reduction (electric vehicles) and renewable energy rather than supply-side fossil fuel subsidies.
The Grattan Institute analyst quoted in the article criticized the Coalition for not funding electric vehicles, which would also enhance fuel security through demand reduction [1].
**The Case Against the Subsidy:**
The subsidy critics make legitimate points.
补贴 bǔ tiē 批评者 pī píng zhě 提出 tí chū 了 le 合理 hé lǐ 的 de 观点 guān diǎn 。 。
International energy experts across the political spectrum acknowledge that domestic refineries are economically non-competitive with cheaper imported fuel due to Asia's cheaper labor and better refining margins [1].
This represents significant taxpayer support ($2+ billion) to maintain domestic refining capacity primarily for national security rather than economic efficiency.
Furthermore, the Grattan Institute's Tony Wood argued that subsidizing refineries to produce higher-quality fuels is strategically questionable because "by the time they have fuel standards in place we'll have stopped using fuel cars" [1].
此外 cǐ wài , , Grattan Grattan Institute Institute 的 de Tony Tony Wood Wood 认为 rèn wéi , , 补贴 bǔ tiē 炼油厂 liàn yóu chǎng 生产 shēng chǎn 更 gèng 高质量 gāo zhì liàng 燃料 rán liào 在 zài 战略 zhàn lüè 上 shàng 是 shì 值得 zhí de 商榷 shāng què 的 de , , 因为 yīn wèi " " 等到 děng dào 他们 tā men 制定 zhì dìng 燃料 rán liào 标准 biāo zhǔn 时 shí , , 我们 wǒ men 将 jiāng 停止使用 tíng zhǐ shǐ yòng 燃油 rán yóu 汽车 qì chē " " [ [ 1 1 ] ] 。 。
This suggests the subsidies may not represent good long-term value for taxpayer money.
**The Government's Justification:**
The Coalition argued that fuel security is a legitimate national security concern.
Australia becoming entirely dependent on imported fuel represents a strategic vulnerability.
* * * * 政府 zhèng fǔ 的 de 理由 lǐ yóu : : * * * *
If global supply chains were disrupted (by war, natural disaster, or trade sanctions), Australia would face a fuel crisis within weeks.
Coalition Coalition 认为 rèn wéi 燃料 rán liào 安全 ān quán 是 shì 一个 yí gè 合法 hé fǎ 的 de 国家 guó jiā 安全 ān quán 问题 wèn tí 。 。
While this may seem hypothetical, fuel security was taken seriously enough that the Albanese Labor government has not terminated the program despite its preference for renewable energy.
Additionally, the subsidy structure was specifically designed to minimize permanent costs—payments only occur during loss-making periods, not as a permanent arrangement.
The maximum payment of 1.8 cents per litre would only occur when refining margins fell below profitable levels [1].
**Price Impact Remains Uncertain:**
While The New Daily's article suggests the subsidies "could increase" prices, this is speculative.
No evidence suggests the subsidies demonstrably increased petrol prices post-implementation.
**Missing Policy Alternative:**
The article highlights that the government did not fund electric vehicles or demand-side fuel security measures.
Labor has since moved in this direction with greater EV incentives, suggesting this is a legitimate policy choice point between the parties.
**Key context:** This is NOT unique to the Coalition—fossil fuel subsidies are common globally.
虽然 suī rán 《 《 The The New New Daily Daily 》 》 的 de 文章 wén zhāng 暗示 àn shì 补贴 bǔ tiē " " 可能 kě néng 增加 zēng jiā " " 价格 jià gé , , 但 dàn 这 zhè 是 shì 推测 tuī cè 性 xìng 的 de 。 。
However, as a subsidy to maintain uncompetitive domestic industry capacity, it is more controversial and less common than direct fossil fuel production subsidies or fuel price caps.
The article correctly identifies the subsidy as controversial and arguably inefficient, but the framing that consumers will "save only 1 cent" is misleading because that's not what the policy was designed to do or what experts predicted would happen.
The article correctly identifies the subsidy as controversial and arguably inefficient, but the framing that consumers will "save only 1 cent" is misleading because that's not what the policy was designed to do or what experts predicted would happen.