Radio Interview, 3AW Mornings

SUBJECTS: Geelong Viva Refinery Fire; Fuel Supply

TOM ELLIOTT, HOST: The Deputy Prime Minister of Australia and the MP for Corio, where the damaged fuel refinery is, Richard Marles, joins us now. Mr Marles, good morning.

RICHARD MARLES, DEPUTY PRIME MINISTER: Good morning, Tom. How are you?

ELLIOTT: Well, I'm good. So, you've been down there, and of course, the refinery is a major part of your electorate. How bad is the damage from the fire the other night?

MARLES: Well, look, it is a significant incident. There's no sugarcoating that. And, you know, I think the first thing we should say is we are really thankful that no one was hurt or injured as a result of this. I think the fact that it happened at 11:15 at night when there were less people around, is probably a blessing. In assessing what this all means, which is obviously what people are now wondering in terms of the output of fuel to the state and to the country, the company is actually relatively optimistic that the impact will be minimal. The reason for that is that the part of the refinery which has been damaged is that part of the refinery which refines petrol, which is the type of fuel which is least pressured at the moment. That is to say, given events in the fuel and diesel, which is the fuels that are most under pressure, and the parts of the refinery which manufacture those fuels have been unaffected. And so, there is hope that they will be able to get back to full production of those relatively quickly. In terms of the petrol side of it, and it gets into the weeds a bit here, the particular components that have been damaged, there is a workaround in terms of being able to manufacture petrol. It's not - it's not what people would want necessarily, but you can continue to manufacture petrol without these particular units, and so they will continue to do that. And they're also confident that they can replace the loss of production in petrol with imports, and there is actually, you know, in terms of petrol on the global market, there is more of that. So, all of which is to say that the company feels optimistic that it'll be a relatively minimal impact on the fuel supply to the state and the country.

ELLIOTT: Yeah, I read the comment by the CEO of Viva Energy, which operates the refinery, that he's confident that imports can replace any lost production capability, but that assumes that there's - the tankers full of fuel will just continue to arrive. Are we confident that that's the case?

MARLES: Well, as I say, globally, the fuel source of which there is more supply available is petrol, and that's what he's talking about in terms of replacing the loss of production at the refinery. Look, I think the way to think about it is, you know, from - from a government point of view, is we take a step back and are thinking about how we manage the entire economy. We've set up a National Fuel Security Plan as you're aware, with the four stages that we've articulated, we're currently at Stage Two. We don't think that this fire of itself means that we shift from one stage to another. We're currently at Stage Two. We'll continue to monitor that. Really, actually, it's the events that are playing out in the Middle East around the Strait of Hormuz, which is going to have a much bigger impact on terms of what we do in stages going forward than what's happened in Geelong over the last 48 hours.

ELLIOTT: If we did move to Stage Three, from two to three, does that involve consumer rationing of fuel?

MARLES: Well, as we go to Stage Three and Four, there would be more stringent measures put in place in respect of how we manage demand. Going, you know, to those sorts of questions. We're not at that yet, but we're obviously contemplating more difficult scenarios as we need to. I mean, you know, rational people plan for the worst and hope for the best, and that's very much what we're doing. And so we do have those scenarios in play. But right now we're at Stage Two, and obviously we hope we stay at Stage Two, but we don't know how events are going to continue to play out in the Middle East and that's really what's going to drive events here.

ELLIOTT: Well, so what about farmers? I mean, farmers have got some difficult decisions coming up. They've got - they don't know if they can get the bulk supplies of diesel that they need. They need fertiliser to sow crops and pesticides to kill pests, and all of those things involve fossil fuels. Can farmers go about their business of growing food, or do they have to make some difficult decisions too in the near future?

MARLES: Well, they're all good questions, and it's very much a focus of our thinking. And in terms of what you've described, both in terms of the need to use diesel, which farmers predominantly use, but also fertiliser, which is also significantly impacted by what's playing out in the Middle East, you know, they are very much forefront in our mind. The visits that the Prime Minister has just been making to Singapore last week, and this week's Brunei and to Malaysia has very much been about trying to secure, as best as we can, supplies of diesel, but also fertiliser to help farmers in this situation. I mean, we continue to work with the sector. I mean, obviously, they are very aware of what this situation is giving rise to, but we continue to work with that sector as best as we can to make sure that there are the supplies necessary for them.

ELLIOTT: Final question, post this crisis and let's hope that in a few months it's just a bad memory. Petrol, diesel prices coming back to something approaching normality. I've criticised both sides of politics for not doing enough about storing fuel here. We only ever seem to have 30 days of supply. So, when all this is over, will you take steps to push 30 days of supply up to, say, 60 or 90?

MARLES: Well, we've increased supply since we've come to government, but we're very much focused on the resilience of the country, and I think actually what's happened in the last month has really put into sharp relief how important our refineries are. And, you know, when we left government in 2013, there were six refineries in Australia. When we came back to government in 2022, there were only two left. We need to make sure these refineries stay, and we will make sure of that, and we need to be looking at every measure, which includes storage, to increase our resilience. But, you know, part of this also highlights how critical are our sea lines of communication, our trading routes. That is Australia's greatest national security risk, and it has been put into sharp relief in the last month, and that's very much at the heart of the announcements that we made yesterday with the National Defence Strategy. We're building our defence force completely around seeking to secure our economic connection with the world.

ELLIOTT: All right, thank you so much for your time. Richard Marles there, Deputy Prime Minister, Minister for Defence and Member for Corio.

ENDS