When governments start calling emergency roundtables it usually means one thing: The planning should have happened years ago.
Last week the Western Australian Government convened a “Fuel Security Roundtable” in response to supply disruptions linked to rising tensions in the Middle East.
The usual suspects – suits, stakeholders and assorted industry representatives including yours truly – were summoned to Dumas House for a large policy pow-wow.
There was the inevitable Welcome to Country, but fortunately we were spared the lecture about we have much to learn from 60 thousand years of wisdom when it comes to strategic planning. There were many earnest statements made. There was a good deal of grave nodding by the Premier and key ministers and intense note taking by the bureaucrats. And of course the media were present to ensure the punters could see the political elite hard at work solving this complex problem.
The end result was a seven-point plan. There is always a plan, problem is not much action. Three of the points are more consultation and communication, a couple are about prioritising ships and tugs, there was something about regional areas but nothing about how to ensure there was fuel for all when the ships stop coming.
But emergency roundtables are rarely signs of governments acting decisively.
They are signs governments have been caught flat-footed and need to look like they have their hands on the wheel even if there is no fuel in the tank.
Because the idea that conflict in the Middle East might disrupt global fuel markets is hardly a bolt from the blue. The region has been the world’s geopolitical pressure valve for decades.
Consider the list of major oil shocks since the 1970s: 1973 – Arab oil embargo, 1979 – Iranian revolution, 1990 – Gulf War, 2003 – Iraq War, 2011 – Arab Spring disruptions, 2022 – Russia-Ukraine war, 2026 – escalating conflict involving Iran.
Roughly one fifth of the world’s oil passes through the Strait of Hormuz. Whenever tensions rise in that narrow stretch of water or any other choke point energy markets react instantly.
The punters around the world understands this instinctively.
When something goes wrong somewhere between the Strait of Hormuz, the Dardanelles and the South China Sea, they head for the fuel bowser.
Which raises the obvious question: Why are we only having this conversation now?
Western Australia consumes roughly 21 million litres of fuel every day – the equivalent of about 300 B-double tanker loads.
Around 40 per cent of that fuel is used by the mining sector.
We are one of the most isolated places in the world and one of the most diesel dependant yet we don’t have the reserves to last much more than a month, less when the panic sets in.
Despite that exposure, fuel security rarely features in serious economic planning until a crisis begins.
Instead we see the familiar pattern. Disruption first. Roundtable second.
The problem is that once a crisis begins panic buying follows and the more the government says “don’t panic” the punters panic, as who believes the government.
This is why having large visible fuel reserves matters.
If there were tanks at Kwinana holding 90 days of fuel, markets would remain calm.
But when the public knows there are only 30 days of supply, queues at petrol stations is one news story about the middle east away.
If the federal government cannot or will not build a proper strategic reserve, then the state government should consider stepping in.
Mining companies should be required to hold ninety days of fuel supply on site or told they cannot tap wholesalers if there is a run on state fuel reserves.
Fuel importers using government-owned wharves (the legislative lever) could also be required to maintain ninety days of reserves.
For Western Australia that’s around a billion litres; enough to fill two OPTUS football sizes tanks, or as per my other older article paying farmers and miners and country wholesalers to store it for the government in a decentralised reserve system across the state.
Yes, the cost would be passed on to consumers.
But the recurring circus of shortages, panic buying and price gouging will continue until Australia finally builds a genuine strategic fuel reserve of its own.
And until that happens, every time tensions rise in the Middle East we will once again find ourselves sitting around emergency roundtables wondering why nobody planned ahead.
