Farmers warn regional fuel squeeze could quickly become a food and animal welfare issue, government action needed

The National Farmers’ Federation says reports from its members across Australia show farmers and fishers in regional communities are increasingly struggling to secure fuel, putting food security and animal welfare at risk.

NFF President Hamish McIntyre said that increases in demand had put pressure on fuel retailers in regional areas.

“While overall national liquid fuel supplies may remain sound, impacts are being acutely felt in regional communities right now, especially among independent retailers, who rely on the ‘spot market’ for supplies,” Mr McIntyre said.

“This is seeing concentrated impacts on regional communities where independent retailers dominate, which is very different from metropolitan areas.

“Given the uncertainty of imports and the increases in domestic demand across the country, the NFF recognises that major fuel importers are prioritising supply to existing contract holders, rather than releasing fuel into the ‘spot markets’.

The Minister for Energy Chris Bowen just announced in Parliament that an extra 100 million litres of fuel will be kept in Australia. He has temporarily relaxed fuel quality rules to allow this to happen and told Parliament that Ampol Australia has committed to prioritise this redirected supply for regions of shortage and the wholesale spot market that supports independent distributors.

The NFF welcomed this announcement as a first step, and said the Government needed to consider what further actions it can take to address what is a real and escalating situation in regional areas, and clearly communicate the trigger points for further action.

“At this point, the Government must be prepared to pull other available levers both now and if the situation continues to deteriorate,” Mr McIntyre said.

“Firstly, we strongly encourage the Government to continue to work closely with the major fuel companies.

“Failing that, the Government should consider appropriate regulatory options. These may include geographic or sector-specific measures to ensure fuel reaches critical industries. Should the situation continue to worsen, food supply should be considered a priority under the Liquid Fuel Emergency Act 1984.”

Mr McIntyre said the situation was rapidly escalating from a fuel logistics problem into a serious risk for Australia’s food production system.

“Farmers and fishers are telling us fuel is becoming harder to access and the prices are simply becoming unrealistic, and they need to see a clear plan from Government as to how they will respond both now and into the future,” Mr McIntyre said.

“The majority of fuel in regional communities is supplied by independent retailers. If those operators can’t access supply, farmers can’t access fuel.

“And if farmers can’t access diesel, they can’t harvest crops, plant crops, or move food and fibre to market. We also have industries like dairy that need fuel to move product every single day.”

Mr McIntyre said the situation also had serious animal welfare implications, such as poultry growers needing fuel to maintain the health of their birds and livestock producers needing to transport fodder to feed animals.

The NFF also urged the Australian Competition and Consumer Commission (ACCC) to act swiftly if anti-competitive behaviour is identified within the fuel market.

“It’s encouraging to see the ACCC already increasing its scrutiny of fuel markets. If anti-competitive conduct is occurring, enforcement actions must occur quickly.

“We know every single Australian is feeling the pinch at the pump, but if these price hikes continue, it could mean the difference between a farmer planting a crop or leaving the paddock bare.”

The NFF noted overnight developments internationally aimed at stabilising supply, with the International Energy Agency announcing the release of 400 million barrels of oil from emergency reserves to help ease global disruptions. The NFF awaits Minister Bowen’s response to this request.

Mr McIntyre said while global markets were responding, it remained critical that domestic supply chains continued to function effectively.

“Australian agriculture depends on reliable fuel access every day,” he said.

“Right now farmers are heading into planting and harvest windows where diesel use spikes. Ensuring fuel reaches farm businesses is essential to keeping food moving from paddocks to plates and ports.”