Page Research Centre, Media Release, 30 March 2026

New paper says Australia’s present fuel strain is not the worst-case scenario and calls for more drilling, new diesel-focused refineries, and coal-to-liquids to restore fuel security.

Australia’s current fuel crisis should not be mistaken for the worst-case scenario.

That is the warning from a major new report released today by the Page Research Centre, which argues that the Iran conflict has exposed just how fragile Australia’s fuel security has become, and that a major war in Asia would be far more devastating.

The paper, All at Sea: Fuel, War, and Australia’s Achilles’ Heel, by Gerard Holland and Jude Blik, argues that Australia has evolved into an economy heavily dependent on diesel while allowing itself to become deeply reliant on imported liquid fuels.

Diesel powers the trucks that move freight, the farms that produce food, the mines that generate export income, and the machinery that keeps industry operating. Yet Australia lacks the domestic production and refining base needed to supply enough of it itself.

Australia’s conventional crude resources have historically been skewed toward lighter oils, and domestic refining capacity was also developed to favour petrol production, which historically was in higher demand. Today this has resulted in a dangerous dependence on imported diesel.

Gerard Holland, CEO of the Page Research Centre and co-author of the report, said the current crisis should end the illusion that Australia can simply buy its way out of danger on the global market. He said it was also not enough to talk only about larger stockpiles, which only serve as a bridge to the restoration of supply by other means.  

“What Australians are seeing now is serious. But it is the warning shot.”

“If conflict on the other side of the world in the Middle East can already drive price spikes, shortages and emergency planning here, then a major war in Asia would be truly catastrophic for Australia.”

“The answer is to rebuild real domestic capability.”

The report argues that Australia has the means to change course.

It points to the country’s vast coal reserves as a major strategic asset that could be used to produce synthetic crude, which can then be refined into diesel and other liquid fuels here in Australia.

The report notes that coal-to-liquids technology is already being used at scale overseas. South Africa has done so for decades, and China now uses enormous volumes of coal to produce diesel and other petro-liquids domestically. Private capital has also attempted coal-to-liquid projects in Australia, but run into excessive green or red tape. 

Mr Holland said the lesson was straightforward.

“Australia has the resources to do far more for itself,” he said.

“If other countries are willing to use their own coal to strengthen fuel security and support downstream industry, we should be willing to seriously examine how Australia can do the same.”

Holland said the logic of the package was simple.

“We should drill more. We should refine more. And we should build the capacity to turn our own coal into liquid fuels here in Australia.”

The paper explores a variety of alternative domestic supply sources including gas to liquids and biofuels, but finds that the sheer scale of Australia’s half-million barrel daily demand for diesel make it unlikely that these will meet a large share of the need.  

It further argues that rebuilding domestic production could deliver defence dividends by enhancing AUKUS, and relieving naval assets of escort-duties in a conflict. This provides strategic value well beyond the immediate fuel question.

Co-author Jude Blik said the country had spent too long mistaking buffers for solutions.

“Stockpiles buy time. They do not solve the problem.”

“If your fuel security strategy is measured in days, then in a serious war an adversary can simply wait you out.”

https://www.page.org.au/2026/03/all-at-sea-fuel-war-and-australias-achilles-heel/