Australia faces high diesel import costs and energy security risks

Australia has incurred over $9 billion in additional diesel import costs over a six-month period, according to a report by the Climate Council. This figure is more than double the extra costs paid by other nations such as Brazil and the United Kingdom. The report, titled ‘Crude Awakening’, highlights that Australia is the world’s largest seaborne importer of diesel, with imports accounting for 90 per cent of its supply.

In addition to diesel, the nation paid an extra $1.6 billion for petrol imports. Economists note that these rising fuel costs impact the broader economy, contributing to inflation across various supply chains. While the adoption of electric and hybrid vehicles has saved Australians approximately $1.7 billion, the transition for heavy-duty sectors like trucking remains slow.

To address these vulnerabilities, advisory firm Cyan Ventures has proposed a ‘Fuel Security Reinvestment Mechanism’. This proposal suggests capping diesel tax rebates for large mining firms that exceed $50 million. The plan aims to redirect funds toward energy security measures, smaller mining companies, and alternative technologies to reduce the nation's heavy reliance on imported fossil fuels.