ANDREW CLENNELL: Joining me now is Energy Minister Angus Taylor. Minister, thanks for joining me. I wanted to start by asking about Ukraine.  What does this mean for the world’s gas supply and for petrol prices back home? 

ANGUS TAYLOR: Well, obviously this is putting upward pressure on oil and gas prices around the world.  Happily, our gas prices are sitting at 77 per cent below the international price because we’ve had strong supply in Australia.  We’ve had a very strong supply response through the pandemic, indeed, which has been a remarkable outcome.  More challenging with oil, obviously, and we’ve seen increases in petrol prices as a result.

We stand ready with all other IEA countries to make collective action as and when that’s required.  And, of course, this vindicates the approach we’ve been taking to making sure we’ve got the fuel security we need in this country with a big increase in local storages now being built; $200 million from the Government; a 40 per cent increase in the mandatory stock holding obligations for diesel; shoring up our remaining refineries in Brisbane and down in Geelong; and also critically accelerating the development of the Beetaloo Basin which gives us access to crude oil. So, all of these are really critical initiatives, but there’s no doubt that this – 

ANDREW CLENNELL: Mr Taylor, how high could petrol prices go?  We’re already seeing them at $2, even $2.20 at some bowsers.  Should we brace ourselves that they could go up as high as $2.50? 

ANGUS TAYLOR: Well I’m not in the business of forecasting commodity prices, Andrew.  It’s a pretty tough game to be in, that one.  But I do recognise that people are feeling the pain at the pump.  I filled up this morning and I saw the price, and there’s no doubt that we’ve seen an increase in price over recent times.  Australia remains in the bottom 25 per cent in terms of prices.  We’re lower in the OECD, so we’re in a much better position than many countries but that doesn’t prevent pain being felt at the bowser.

As I say, I’ve personally contacted the US Energy Secretary and engaged with her on making sure that the world takes any action it can, and through the IEA we’re also working to make sure we deal with the disruptions as and when we can.  Our first priority will always be doing everything we can to make sure we have the energy security we need in this country, the access to the gas and the oil we need to keep our economy moving.

ANDREW CLENNELL: And despite these sanctions and this war, you believe we’re all right on that front? 

ANGUS TAYLOR: Well as yet it’s very clear that we have the supply we need and on gas in particular we’ve been in a very strong position over the last little while and we’ve never seen a situation where our prices are 77 per cent or lower than the prices in Asia and Europe.  It’s an absolutely remarkable situation and we should pay tribute to the incredible work that those workers in our gas industry have done through the pandemic to keep supply moving, Andrew, and we need that.  We need that to keep our economy moving.  We also need it to bring down emissions; gas is playing a very important role in that process, and we’re in a strong position.  There are risks – there’s no doubt about that – in the world at the moment.  You only have to look at the newspapers to see those risks.  But we’re managing them very carefully.

ANDREW CLENNELL: Well, we’ve got the Independent Senator Rex Patrick on his own calling for a cut in excise, similar to what John Howard did in 2001, but the Prime Minister doesn’t seem to want to cut that particular tax.  Is there a belief in the Government it wouldn’t make that much difference? 

ANGUS TAYLOR: I should start by saying our prices at the bowser, while they are higher than anyone would like at the moment, of course, as I said, they’re in the bottom 25 across the OECD, so we’re in a much better position than most countries.  Obviously, the excise has been used for a long time as a basis for raising revenue, which is effectively allocated to our roads and, I mean, that’s enormously important investment that we’ve got to continue to see across the country.  There’s no plans to change the excise, but we do stand ready to take action collectively across the world.

This is a global commodity price so there’s no point Australia acting unilaterally on the global oil price.  It’s something that we would have to work with other countries on.  And there’s been obviously – I’ve been involved in discussions over recent weeks on exactly this issue.  The most important thing of all always with commodity markets like this is more supply coming out.  We’ve been very focused on supply over recent years.  I know the Americans are very focused on supply right now and encouraging extra supply into the market will always be the best response.

ANDREW CLENNELL: All right. You write today in the Daily Telegraph that renewables supported by a battery that lasts for only a few hours is simply not enough.  Batteries can make a contribution but fall far short of what is needed and yet that’s the New South Wales Government’s solution to Eraring closing early.  Is it just not enough and do you wish you had a bit more notice from the New South Wales Government about this prospect? 

ANGUS TAYLOR: Well, it’s not a decision by the New South Wales Government.  That was decision by Origin, of course.  But it’s also the makeup of what is being proposed here.  There’s 2,100 megawatts leaving the market.  What’s proposed is 700 megawatts of short-duration batteries and that’s just not enough.  It’s obvious it’s only 25 per cent of what we’re losing, Andrew, and that’s a big chunk of the market that would leave, if we weren’t to replace it, if it wasn’t to be replaced, and we know from past experience that drives up the price.  It’s not rocket science.  We’ve seen it on a number of occasions. So ultimately, we’ve got to make sure that it is replaced.  Origin has an obligation to its customers in the market, as a major player in the market, to do the right thing.  We expect that with the energy companies.  We were very clear with AGL about that.  We stepped into the market and the lots of criticism about that.  Kurri Kurri gas generator is going ahead – 

ANDREW CLENNELL: Just on that Minister Taylor, just on that – just, finally, could you expand the Kurri Kurri gas plant?  Could it be even larger or could the Federal Government, Snowy Hydro, get involved in building more gas plants?

ANGUS TAYLOR: Well, we’ve got no plan to do that. But we are already supporting through $30 million the development – the feasibility study for a major gas generator in the Illawarra over and above the Tallawarra gas generator, which is proceeding. So, there’s been an enormous amount we’ve been doing over a long period of time to get more supply into the market.  This has to be the focus of everybody.  In contrast to the Labor Party who assumed, Andrew, when they put out their plan before Christmas that every coal generator would stay in until the end of their lives. I mean it was just a ridiculous assumption.  We’ve never made that assumption, which is why we’re driving the reforms we are; we are putting the extra capacity into the market.  And that approach has been vindicated, despite criticism from many, and we know it is the right way to go. 

More supply into our market puts downward pressure on prices whether that’s gas, that’s oil, it doesn’t really matter what you’re talking about; it’s pretty straightforward.  And that’s the focus we’ve had and will continue to have despite the opposition from the Labor Party on many occasions, despite the fact that there are some in the industry who have wanted to get prices up, make more profits at the expense of customers.  We will always stand on the side of the customer.

ANDREW CLENNELL: Sure. Minister Taylor, thanks so much for your time.