The South Australian state government has secured a strategic reserve of up to 20 million litres of diesel to protect the state’s primary production sector from global supply shocks.
Under a new commercial agreement with bulk fuel supplier IOR, the state will utilise spare capacity at the Port Bonython storage facility in the Upper Spencer Gulf.
An initial 10 million litres will be purchased and stockpiled immediately, with the government holding an option to double that volume to 20 million litres as required.
The move comes as a direct response to ongoing volatility in the Middle East and global supply chain uncertainties. The initiative complements the federal government’s AU$10 billion fuel resilience package, acting as a localised safety net while the national reserve is established.
In the event of a supply crisis, the fuel would be deployed rapidly to critical areas in accordance with the National Fuel Security Plan.
“This strategic diesel reserve will help build confidence for South Australia’s primary producers as we confront the international fuel crisis,” said Premier Peter Malinauskas.
“While diesel continues to arrive on our shores, and the Commonwealth has committed to a AU$10 billion plan to ensure Australia’s long-term fuel security, it is prudent that we invest in our own reserve to provide a buffer in the case of unforeseen events.”
The Premier emphasised that the deal was structured to add to existing supply from Singapore rather than competing with the federal government or local primary producers for current stocks.
Energy and Mining Minister Tom Koutsantonis noted that negotiations with IOR began shortly after the state election, describing the move as a practical step to manage potential disruptions.
“This is an opportunity to secure additional and immediate diesel supply and storage, using existing infrastructure that is currently underutilised,” he added.
The South Australian Strategic Gas Reserve will see Santos supply 20 petajoules of gas each year for 10 years from 2030 – the equivalent of a third of the state’s entire annual gas usage across the residential, commercial and industrial sectors.
IOR CEO Drew Morland hailed the partnership, noting that the convenient location of Port Bonython is vital for supporting the agriculture and mining sectors across the Eyre Peninsula and Upper Spencer Gulf.
