Prime Minister Anthony Albanese announced that Export Finance Australia has formalised fuel underwriting agreements with the nation’s two largest suppliers, Ampol (ASX:ALD) and Viva Energy (ASX:VEA).
The landmark deal, facilitated by recently passed fuel security legislation, empowers the federal government to underwrite oil purchases, ensuring a steady influx of additional supply despite global market volatility.
Speaking in Brisbane, the prime minister confirmed that the EFA has finalised terms with the Geelong-based Viva Energy and Brisbane-based Ampol.
The intervention allows the government to exert greater control over the logistics of Australia’s fuel reserves, including the ability to direct exactly where the additional supply is distributed across the country.
Energy Minister Chris Bowen emphasised that the primary objective of the underwriting is to bypass commercial barriers created by fluctuating spot prices.
Under the framework, the government will provide financial backstops that enable companies to secure oil cargoes that would otherwise be deemed commercially unviable.
Minister Bowen noted that the arrangement ensures fuel intended for the Australian market is not diverted to other nations due to price constraints, effectively prioritising domestic energy security over international market competition.
At the time of reporting, the share prices of Ampol and Viva Energy were $33.13 and $2.48, respectively.