00:00:00
Speaker 1: Let's talk petrol. We will talk about this from the perspective of in international agreement and how we've short up supply with the foreign Mian's depending on a little bit later, but we wanted to do a bit of a forecast of how this is going to affect you filling up your car with energy. Allist Kevin Morrison, who joins us now, Kevin, good morning to you.
00:00:18
Speaker 2: Good morning Will So Kevin.
00:00:21
Speaker 1: Few things have changed since and some haven't since we last spoke. The situation in the Middle East is very unclear still about what's happening there. We've got an excise that's about to expire, and we've got some behaviors in Australia that seem to have changed in terms of our top line fuel consumption. Do some of all that is? What do you think are we going to see dramatic price volatility at the bowser over the second half of this year?
00:00:50
Speaker 2: I think yeah, sir, definitely will be volatility because you've got sort of some good things happening and then you've also got some bad things happening, and so both those are touting at each other. So that's you know, that's why we're going to continue to see prices move. So in the in the short term, I mean we we've just sort of seen the Brent crew price fall overnight because the the US and around seems be in talks and you know, Trump is sound some positive things about that, but when you listen to the Iranians, they're saying something quite different, so we never quite know what's going to what the outcome of that is going to be. The other sort of positive thing is is all that crew that was locked up in the straight up the Moose when it was a shot earlier this year is now being discharged into the countries across Asia, so it's going to be refined and then it's going to be sent to Australia. So we should start to see through through August more rivals of of it of imports. So that's the good news. But if there is no resolution with these talks, then and we have further talent of any any maritime traffic through the straightform Moose and also through the red see now you know we're back to a very very tight markets.
00:02:05
Speaker 3: Kevin is petrol price that the bowser always determined on the barrel price or like we'll point it out if we're consuming less petrol, and you mentioned we've got those deals with some Asian countries to get more petrol into the country and there's an oversupply. Can prices come down without the barrel price coming down?
00:02:23
Speaker 2: Not really no, I mean we illustrate because we import ninety percent of what we consume every day, so we really are exposed to international prices. Although we talk about the Brent price, but that's actually a more important price is diesel because I know we talk about we've been talking about petrol, but actually diesel is more important because more than fifty percent of what we consume every day in fuel is diesel, and we import most of that as well. So we're very exposed to the international diesel price, and that is actually trading that over one hundred and forty dollars a barrel. I know, we're talking about the brand price, which is now down below ninety, but the real price that what Australians will be paying is that diesel price of over one hundred and forty dollars a barrel, So, you know, and that's why we've seen diesel prices remain very high, whereas we've seen falls in petrol prices.
00:03:20
Speaker 1: One notable shift from this conversation today we're having Kevin to one we might have had at the outset of this conflict was I imagine a lot of our conversation would have been around our strategic fuel reserve and the risk of not being expensive but actually entirely running out. What do you think we've learned about the resilience of fuel reserves and the manner in which a country like Australia can work the angles with deals with countries like Singapore to shore up supply.
00:03:49
Speaker 2: Yeah, look, I think in this period, I mean Australia has done very well. When you look at the level of imports, it's more or less been consistent, so it hasn't dropped off, even though the production of oil has has dropped. And so that's that's been a good thing. And as you say, you know, because all these bilateral deals that we've done, so that's all been a positive thing. But just look in the longer term, I mean, we haven't invested enough in storage and we've really got to address that. I know, the the government likes to say, well, look, you know we've increased diesel stockpiles, but when we sort of step back the main level, we should be looking at is what the International agency, the International Energy Agency require They want us to have ninety days, and we're still only around fifty days. So we've got a lot more to do in that regard, given that we are so dependent on imports, it'll be wouldn't be so it wouldn't be so much of an issue if we produce more of our own oil. And even on that matter, we don't have that much commercial oil reserves the ground. I mean, we've got plenty of gas, we've got plenty of coal, you know, we've got plenty of the line or we've got plenty of everything, but we just don't have that much oil.
00:05:04
Speaker 1: Just on that point, Kevin, to what we can do in Australia to secure our own supply. I know the Thin Review is reporting this morning that the Prime Minister is set to spend four million dollars on a feasibility study into building potentially our first new oil refinery in sixty years. So refining is obviously a part of it. Getting the crewd here though, is still a barrier, is it not? How much do we do we benefit from a refinery being built here?
00:05:30
Speaker 2: Well, I mean you've just almost answer great. I mean we're still going to be dependent on imports. Yeah, I mean, you know all very well say we've got the refiners where we're actually produced, but we're actually still relying on important foreign oil, you know, because simply, you know, the old that we're producing is less and less. I mean, I think we're on track to our actual own oil production. Is that fifty years lows? You know, it's just been trending downwards for the last twenty years, you know, since you know turnlets entrued me back in year two thousand. We're almost self sufficient, but it has just been going one way downwards ever since then. And that's why, you know, we're much more exposed to international markets and that and that's why I feel we should be investing more in storage. But also, you know, we've also seen a reaction by consumers that they've just been buying electric vehicles. In fact, I was just reading yesterday that we've bought more electric vehicles in the first half of this year than we did for the whole of last year.
00:06:27
Speaker 1: Yeah, it's a remarkabere quickly behavior has changed. Kevin, that was fantastic. Thank you. Our energy analyst from the i e e f A. Kevin Morrison,
Speaker 1: Let's talk petrol. We will talk about this from the perspective of in international agreement and how we've short up supply with the foreign Mian's depending on a little bit later, but we wanted to do a bit of a forecast of how this is going to affect you filling up your car with energy. Allist Kevin Morrison, who joins us now, Kevin, good morning to you.
00:00:18
Speaker 2: Good morning Will So Kevin.
00:00:21
Speaker 1: Few things have changed since and some haven't since we last spoke. The situation in the Middle East is very unclear still about what's happening there. We've got an excise that's about to expire, and we've got some behaviors in Australia that seem to have changed in terms of our top line fuel consumption. Do some of all that is? What do you think are we going to see dramatic price volatility at the bowser over the second half of this year?
00:00:50
Speaker 2: I think yeah, sir, definitely will be volatility because you've got sort of some good things happening and then you've also got some bad things happening, and so both those are touting at each other. So that's you know, that's why we're going to continue to see prices move. So in the in the short term, I mean we we've just sort of seen the Brent crew price fall overnight because the the US and around seems be in talks and you know, Trump is sound some positive things about that, but when you listen to the Iranians, they're saying something quite different, so we never quite know what's going to what the outcome of that is going to be. The other sort of positive thing is is all that crew that was locked up in the straight up the Moose when it was a shot earlier this year is now being discharged into the countries across Asia, so it's going to be refined and then it's going to be sent to Australia. So we should start to see through through August more rivals of of it of imports. So that's the good news. But if there is no resolution with these talks, then and we have further talent of any any maritime traffic through the straightform Moose and also through the red see now you know we're back to a very very tight markets.
00:02:05
Speaker 3: Kevin is petrol price that the bowser always determined on the barrel price or like we'll point it out if we're consuming less petrol, and you mentioned we've got those deals with some Asian countries to get more petrol into the country and there's an oversupply. Can prices come down without the barrel price coming down?
00:02:23
Speaker 2: Not really no, I mean we illustrate because we import ninety percent of what we consume every day, so we really are exposed to international prices. Although we talk about the Brent price, but that's actually a more important price is diesel because I know we talk about we've been talking about petrol, but actually diesel is more important because more than fifty percent of what we consume every day in fuel is diesel, and we import most of that as well. So we're very exposed to the international diesel price, and that is actually trading that over one hundred and forty dollars a barrel. I know, we're talking about the brand price, which is now down below ninety, but the real price that what Australians will be paying is that diesel price of over one hundred and forty dollars a barrel, So, you know, and that's why we've seen diesel prices remain very high, whereas we've seen falls in petrol prices.
00:03:20
Speaker 1: One notable shift from this conversation today we're having Kevin to one we might have had at the outset of this conflict was I imagine a lot of our conversation would have been around our strategic fuel reserve and the risk of not being expensive but actually entirely running out. What do you think we've learned about the resilience of fuel reserves and the manner in which a country like Australia can work the angles with deals with countries like Singapore to shore up supply.
00:03:49
Speaker 2: Yeah, look, I think in this period, I mean Australia has done very well. When you look at the level of imports, it's more or less been consistent, so it hasn't dropped off, even though the production of oil has has dropped. And so that's that's been a good thing. And as you say, you know, because all these bilateral deals that we've done, so that's all been a positive thing. But just look in the longer term, I mean, we haven't invested enough in storage and we've really got to address that. I know, the the government likes to say, well, look, you know we've increased diesel stockpiles, but when we sort of step back the main level, we should be looking at is what the International agency, the International Energy Agency require They want us to have ninety days, and we're still only around fifty days. So we've got a lot more to do in that regard, given that we are so dependent on imports, it'll be wouldn't be so it wouldn't be so much of an issue if we produce more of our own oil. And even on that matter, we don't have that much commercial oil reserves the ground. I mean, we've got plenty of gas, we've got plenty of coal, you know, we've got plenty of the line or we've got plenty of everything, but we just don't have that much oil.
00:05:04
Speaker 1: Just on that point, Kevin, to what we can do in Australia to secure our own supply. I know the Thin Review is reporting this morning that the Prime Minister is set to spend four million dollars on a feasibility study into building potentially our first new oil refinery in sixty years. So refining is obviously a part of it. Getting the crewd here though, is still a barrier, is it not? How much do we do we benefit from a refinery being built here?
00:05:30
Speaker 2: Well, I mean you've just almost answer great. I mean we're still going to be dependent on imports. Yeah, I mean, you know all very well say we've got the refiners where we're actually produced, but we're actually still relying on important foreign oil, you know, because simply, you know, the old that we're producing is less and less. I mean, I think we're on track to our actual own oil production. Is that fifty years lows? You know, it's just been trending downwards for the last twenty years, you know, since you know turnlets entrued me back in year two thousand. We're almost self sufficient, but it has just been going one way downwards ever since then. And that's why, you know, we're much more exposed to international markets and that and that's why I feel we should be investing more in storage. But also, you know, we've also seen a reaction by consumers that they've just been buying electric vehicles. In fact, I was just reading yesterday that we've bought more electric vehicles in the first half of this year than we did for the whole of last year.
00:06:27
Speaker 1: Yeah, it's a remarkabere quickly behavior has changed. Kevin, that was fantastic. Thank you. Our energy analyst from the i e e f A. Kevin Morrison,
