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Lifeline for Australian oil

Australia’s oil refineries have been given a lifeline as the government brings forward a six-month rescue package to counter the devastating impacts of COVID-19.

The nation’s three remaining oil refineries will receive $83.5m in taxpayer funds – at least one cent for every litre of petrol, diesel or jet fuel they produce after January 1.

In exchange, the government will be allowed to continually monitor the refineries’ financial operations.

The plan was unveiled in September and was set to come into effect on July 1, 2021, but has been brought forward to soften the blow of COVID-19. Travel restrictions brought on by the pandemic have sharply reduced the demand for fuel, prompting fears refineries would be forced to shut their doors.

Energy Minister Angus Taylor said the move was about recognising the important role refineries played in the nation’s fuel security.

“The production payments will help the industry withstand the economic shock of this crisis, protecting local jobs and industry, bolstering our fuel security and shielding motorists from higher prices,” he said.

He argued the move would have a positive flow-on effect for industries that relied on a stable fuel supply.

“For years, our refineries have played a special role in our energy system in this country. They provide the liquid fuels we need with a very secure source of supply for those essential industries,” he said.

The move comes after weeks of talks between the federal government and refinery unions, and negotiations will continue over a longer-term market mechanism. Mr Taylor said a permanent system would be in place by the middle of next year.

Australian Workers’ Union National secretary Daniel Walton, who led a delegation to Canberra to push for refinery support, has welcomed the announcement.

“On behalf of the thousands of AWU members who refine fuel in Australia I commend the government for listening and for acting. Today’s announcement is a hugely important step,” he said.

“Being able to make our own fuel is a critical sovereign capability. Without it, we are completely at the mercy of trade routes that are threatened by potential international conflict or pandemics.”

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