OLIVER PETERSON: The Federal Government is going to spend $94 million on a fuel reserve to bolster the national stockpile. Angus Taylor is the Federal Energy Minister and he's live on your radio right now. Angus Taylor, welcome to 6PR.

ANGUS TAYLOR: Thanks for having me, Oliver.

OLIVER PETERSON: You're going to be taking advantage here of the very, very low oil prices?

ANGUS TAYLOR: Exactly right. So consumers, buyers of petrol at the moment will be seeing lower prices than we had, significantly lower depending on where you are, and we're going to take advantage of that as the Federal Government. Our fuel reserves in Australia over the long-term have become lower than they should have been, particularly as Bass Strait which was the source of much of our crude oil has run down. That means we have to have fuel reserves available. Initially, because there's only storage available in the United States, that's where we'll start it off. But we want to see storages available here in Australia. Right now, all the storage that is available is being used because of the COVID-19 situation, understandably. So the plan is to transition it over to Australia over time. But the important point here is that this will put Australian farmers and miners, manufacturers who are so reliant on a reliable source of fuel, it'll create for them a supply chain where they can be sure when that harvest comes, that the fuel is available to get the crop off, or the mine, the iron ore or coal or whatever it might be, out of the ground- and that is absolutely essential for Australian industry, and Australian commuters of course because they rely on a reliable source of fuel as well.

OLIVER PETERSON: Alright. So storage in Australia right now is at capacity, hence why you have to put this in the United States. That seems rather odd! A decision you've obviously had to make because we're at capacity?

ANGUS TAYLOR: We're at capacity, in fact the world is very close to capacity. Just about the only storage left in the world is in the United States and because of that we saw yesterday a bizarre situation where prices actually were negative. People were being paid to take the fuel away because the holders of the fuel had no storage left. So that is a great opportunity for Australia to start building a fuel reserve. It is something we've talked about for years - we're now working, we're now doing it, we're actually getting on with it. And as I say, there's many users of fuel out there, the trucking industry is another example where they've understood - those industries for years - that we need to start securing our fuel reserves, our supply chains and we're doing exactly that.

OLIVER PETERSON: So what does $94 million buy you, Minister?

ANGUS TAYLOR: It depends on the price. So at a negative price it buys you a lot obviously.

OLIVER PETERSON: I'm sure, yeah. [Laughter]

ANGUS TAYLOR: Yeah, exactly, an infinite amount in theory. But in practice, look we have very low pieces. Now I'm not going to forecast what the price is going to be when we're out in the marketplace but it is much lower than it was. To put it in perspective, we're seeing prices of $10, $20 a barrel now. Only a few months ago we were seeing prices more like $60 or $80. So it's very low cost. Consumers are seeing that benefit at the bowser of course, and we want to take advantage of it as a government. 

OLIVER PETERSON: Are consumers still paying too much for their fuel? Because the ACCC came out this morning saying petrol profits are the highest in ten years. We've started to see the wholesale price drop by around 50 cents per litre but the retail had only fallen short in major capitals, decreasing around 45 cents. 

ANGUS TAYLOR: Yeah. It depends on the location. We've certainly seen a reduction in retail prices, there's no doubt about that. Have they come down as much as the price of a barrel of oil? It depends where you are. But you know, we want to see those benefits being passed on to consumers and that's why the ACCC has been a cop on the beat out there making sure that those savings are being passed through to consumers.

OLIVER PETERSON: Angus Taylor, appreciate your time. Thank you very much.

ANGUS TAYLOR: Thanks for having me, Oliver.

ENDS