Mystery surrounds a diesel tanker that has been anchored off the Australian coast for months without offloading its cargo, as the nation grapples with soaring fuel costs.
Petrol and diesel prices have spiked this week after the federal government’s temporary fuel excise relief expired, while drivers were also hit with a new inflation adjustment at the pump.
Prices have been under pressure since the Iran war left Australia facing a potential fuel shortage, and requiring diesel imports from around the world, including the UK and the US, to meet our needs.
In April, government agency Export Finance Australia (EFA) stepped in, using taxpayer funds to underwrite shipments of roughly 795 million litres of diesel in partnership with energy companies.
According to industry sources in The Australian Financial Review, the federal government’s intervention has led to an oversupply of diesel.
And tankers have been parked off the coast for months while they wait for storage to become available.
They include the Panama-flagged PIS Madura, which arrived off the Queensland coast from South Korea in May and still has not discharged its diesel.
Sources claim its total demurrage – the daily cost of leasing a ship that cannot offload its cargo – could be as high as AUD $5 million over three months.
But exactly why PIS Madura has spent so much time in Australian waters is subject to debate.
Macquarie University Senior Finance Lecturer Lurion De Mello said the vessel may have suffered a mechanical issue, because data from the London Stock Exchange Group showed tankers were discharging their fuel in Australia “fairly quickly”.
Although he saw Australia’s current diesel supply as healthy, Dr De Mello doubted there was a supply glut.
He pointed out that the country consumes just under 100 million litres of diesel a day, so the EFA’s contribution of 795 million litres was “hardly a truckload of diesel or something that would be stranded and waiting for discharge”.
Dr De Mello said ships were getting in and out of ports like Kurnell and Botany Bay in 48 to 72 hours, which was “absolutely normal”.
“There are some delays in WA for one or two, but these are very small ports and nothing alarming,” he told news.com.au.
“Even if the ship is some covert operation, I doubt a port would pick and choose, keep Government-sourced ships out at sea, and allow others to discharge.”
Kevin Morrison, energy finance analyst at the Institute for Energy Economics and Financial Analysis, had a different view.
He suspected PIS Madura hadn’t moved because it was still waiting for storage space to free up after the EFA inadvertently ordered too much fuel following the outbreak of the war.
“The Australian government used all its levers, did the energy diplomacy, and then it got its finance arm involved, and I suppose that intervention of another player that’s not normally in the oil market day-to-day, they have used their financial leverage and bought these extra cargoes,” Mr Morrison told news.com.au.
“That in itself may not be such a problem, but Australia inherently has too little storage.”
He said those imports, combined with fuel refined at home and a drop in consumption, had led to “quite a big surplus, and because we’ve got limited storage capacity that quickly ran out, particularly for diesel and petrol”.
“Now we’re in a situation where there’s cargoes off the coast of Australia and they’re having a hard time unloading.”
Depending on its size, a vessel waiting to offload diesel could be carrying as much as one day’s worth of imports, Mr Morrison said.
Another blow for consumers
PIS Madura was sitting idle just as Australian fuel consumers were hit with a double whammy this week, as fuel excise relief came to an end and a new tax hike took effect.
Fuel excise was temporarily reduced on April 1 from 52.6 cents a litre to 20.6 cents a litre, a 32 cents per litre discount to wholesale fuel prices.
The Albanese Government then partially extended the relief to August 2, albeit reducing the discount at the pump to 16 cents a litre.
But that relief ended at midnight on Sunday, and on Monday, petrol and diesel were also slapped with a tax hike from 36.6 cents per litre to 53.7 cents per litre as part of their twice-yearly inflation indexation.
The NSW Government website FuelCheck showed average petrol prices in the state had jumped from $1.94 per litre on Sunday to $2.06 on Thursday, while diesel had hit $2.50 per litre.
News.com.au has contacted the PIS Madura’s owner and Viva Energy, the reported owner of the diesel on board, for comment.
Read related topics:Brisbane