Australia's $9 Billion Diesel Bill and the Two Rival Plans to Fix It

Fill a 60 litre tank with diesel today and you'll pay about $25 more than the driver beside you filling up on unleaded. On Petrolmate's data, the 3,553 servos that reported diesel prices through the government fuel schemes in the past 48 hours have a median of 281.9 cents a litre. Unleaded sits at 239.9 across 5,437 servos.

Two reports landed this week explaining how Australia got here. They came a day apart, they lean on many of the same facts, and they want to send the country in opposite directions.

Where the $9 billion comes from

On Wednesday the Climate Council released Crude Awakening, a scorecard that puts Australia's extra bill for imported diesel at around $9 billion from March to August. That's $324 for every Australian and two and a half times the next country on the list, Brazil, at $3.5 billion. South Africa, France and the UK came in at $2.9 billion each.

The figure comes from the Centre for Research on Energy and Clean Air in Helsinki. Its researchers took the prices futures markets expected in the days before the war began on 28 February, then compared them with what importers actually paid. Those are wholesale benchmarks, so tax, retail margins and freight are left out, and it's an estimate. Worth keeping in mind that the $324 is a national import bill divided by population, so nobody handed it over at the bowser. For motorists, the council's own estimate is about $5 billion in extra fuel costs this year, measured against prices before the war.

Why is Australia's number so big? Volume, mostly. This is the world's largest seaborne diesel importer, bringing in around 90% of what it uses. Consumption hit about 33 billion litres in 2025, more than double the 2000 figure and roughly twice what the country burns in petrol. Road freight and mining account for 65% of it. If imports ran evenly through the year, the bill works out at very roughly 60 cents on every imported litre.

Thursday's answer: keep the refineries running

By Thursday the John Curtin Research Centre's Powering Australia was in the headlines. The centre is a think tank with ties to the labour movement. The Australian Workers' Union and Viva Energy, which owns the Geelong refinery, each wrote a foreword, and the union describes itself as a partner on the project, so read it knowing who's at the table. The centre says the conclusions are its own. The Sydney Morning Herald ran the warning as "dangerously unprepared". The report's summary says "structurally unprepared".

Its first recommendation is a commitment to keep refining oil in Australia for the next two decades. Capacity has shrunk 70% since 2012. Clyde became an import terminal in 2012, Kurnell followed in 2014 and Bulwer Island shut in 2015. BP announced the end of Kwinana in late 2020 and Mobil announced Altona's in early 2021. What's left is Geelong and Ampol's Lytton plant in Brisbane, both built between the mid 1950s and mid 1960s, together covering about 20% of the country's fuel needs.

Here's the fascinating backstory. The Fuel Security Services Payment began in July 2021 to carry refiners through lean periods, part of a package with a headline value of about $2 billion. The report says that package has delivered just over $37 million in five years. (The ABC put Geelong's payments alone at nearly $40 million last December, so treat the exact figure with care.) To be fair, a safety net is meant to sit idle in good times. The payment is capped at 1.8 cents a litre and flows only when margins are thin, and they haven't been thin lately. Ampol's Lytton refiner margin was US$23.92 a barrel in the September quarter, up from US$10.64 a year earlier. The report's worry is the next downturn.

One surprise: this refinery friendly report is lukewarm on building a new one. It says a large new plant, the idea Perdaman is studying at Karratha, could cost upward of $15 billion and take up to ten years to build. It might then have only 10 to 15 viable years before falling demand bites.

Wednesday's answer: burn less diesel

The Climate Council argues new refineries would keep Australia exposed anyway, since they'd rely on imported oil. It wants electric trucks, electrified mine fleets and a rethink of fuel tax credits, which are expected to cost $10.7 billion this year, with mining claiming 47%. Nicki Hutley, the council's economist and spokeswoman, told AAP: "If we keep relying on imported oil, that is leaving our energy security in somebody else's hands."

The catch is the starting point. Electric trucks make up just 0.7% of new truck sales here, compared with 20% in China, 7% in Germany and almost 3% in the UK. Only 1,384 were on the register as of January. Electric and hybrid cars save an estimated 17.4 million litres a week, which sounds like plenty until you set it against national use, where it's roughly 2% of the petrol and diesel burned weekly. The union's foreword goes straight at that gap: "many of the same industries that run on diesel and jet fuel today will continue to do so well into the future."

The one point they agree on

Here's what's really going on for your wallet. Neither plan makes fuel cheaper any time soon, and both reports effectively concede it. The Climate Council writes that "locally refined fuel is still priced on global markets". The refinery report says local prices are "based on global prices (import parity) and local competition". A 20 year refinery promise buys supply insurance, a point we also made in August about the proposed new refinery in the west.

Insurance still has value. Official figures at 20 October showed 39 days of petrol, 31 of diesel and 28 of jet fuel. On 23 October, 90 of the 8,167 sites the government tracks had no diesel. Japan and South Korea reported about 254 and 208 days of supply early this year, though they count differently. Ampol expects Lytton's cracking unit back in mid November and says it doesn't expect customer supply to be affected.

The idea that could reach your pocket

Tucked into the refinery report are two proposals aimed squarely at motorists, and they've barely rated a mention so far.

The first is hardship relief with triggers written into law. When prices move sharply away from long term trends, payments would flow to lower income and transport dependent households through the existing welfare and tax systems, then lapse automatically. To put this in perspective, this year's excise and road user charge cuts cost $3.3 billion, went to every buyer and ended in early August. Brent settled near US$117 a barrel on 23 October, around a six month high, and there's no excise cut in place this time. A rule set in advance would take that call out of the middle of a crisis.

The second is a single national fuel price dataset. Formal price surveillance ended in 1998, and the ACCC now watches the market without setting prices. State schemes run to their own rules, with Western Australia fixing prices a day at a time and the NT 24 hour price lock working to its own timetable. Petrolmate's prices come from those same government schemes, so this one's close to home. The report stresses the idea isn't based on any finding of misconduct.

What this means at the bowser

No government response to either report had surfaced at the time of writing. In the meantime:

The refineries, the reserves and the electric trucks are all years away. Comparing the servos on your way home isn't.