Purpose:

To improve Australia’s fuel security and confidence in supplies, support sovereign capability, meet international energy obligations, and prevent disruptions through requiring minimum quantities of fuel stocks and making payments for refined fuel production.

Objectives:

• To improve security and confidence in Australia’s fuel supplies.
• To support sovereign capability to maintain fuel supplies.
• To contribute to meeting Australia’s obligations under the International Energy Agreement.
• To assist in preventing disruptions in fuel supplies.
• To achieve fuel security by requiring the holding of minimum quantities of stocks of certain fuels in Australia.
• To achieve fuel security by making payments for production of refined fuels to support the contribution made by refineries in Australia to the security of Australia’s fuel supplies.

Key Provisions:

• Establishes a minimum stockholding obligation (MSO) for regulated entities that undertake certain fuel refining or importing activities.
• Defines conditions under which an entity becomes, remains, or ceases to be subject to the MSO.
• Specifies how the designated quantity of MSO product for an entity is determined, including reference to a target number of days set by the Minister.
• Outlines the criteria for when an entity is considered to “hold” stocks of an MSO product, generally requiring storage in Australia and specific ownership or legal arrangements.
• Provides mechanisms for the temporary reduction or suspension of the minimum stockholding obligation.
• Introduces a Fuel Security Services Payment (FSSP) as a bounty for refiners of FSSP fuel in Australia.
• Sets out reporting and notification obligations for entities subject to the MSO and recipients of FSSP.
• Details repayment obligations for FSSP recipients under certain circumstances, such as refinery cessation.
• Establishes a compliance and enforcement framework, including monitoring, investigation, civil penalties, infringement notices, enforceable undertakings, and injunctions.
• Lays out provisions for the review of decisions made under the Act.

Evidence of Compliance Requirements For Agricultural Organisations:

• Holding Minimum Stock Quantity: Entities subject to the minimum stockholding obligation must hold at least the quantity of stocks of the MSO product designated for them on obligation days.
  • Evidence: Maintaining accurate inventory records to demonstrate the quantity of MSO product held.
• Australian Controlling Corporation Responsibility: An Australian controlling corporation must ensure that its subsidiary complies with the minimum stockholding obligation.
  • Evidence: Implementing and maintaining internal compliance frameworks, audit trails, and reporting mechanisms that show oversight and active measures to ensure subsidiary adherence.
• Entity’s Advice about Expected Designated Quantity: If subject to the minimum stockholding obligation at the start of an advice window, an entity must, before the end of the advice window, give the Secretary written advice (in the approved form, if any). This advice must include the quantity (in megalitres) of stocks expected to be notified under section 15 before the end of the next notice window, and any matters that might affect the entity’s capacity to hold that quantity of stocks.
  • Time Frames: Advice must be given before the end of the advice window (a period prescribed by the rules).
  • Measurement Standards: Quantity reported in megalitres.
  • Reporting Requirements: Submit written advice in the approved form.
• Application to Temporarily Reduce Stock Quantity: An entity may apply in writing to the Secretary to temporarily reduce the quantity of stocks it must hold.
  • Documentation: The application must specify the reduced quantity, set out the entity’s reasons, and meet any other requirements prescribed by the rules.
• Ensuring Stocks are “Held”: An entity must ensure that stocks it counts towards its obligation meet the definition of “held,” which includes:
  • Stocks being owned by the entity (Section 22), or the entity being entitled to take ownership under a legally enforceable arrangement (Section 23), or stocks being held, reserved, or quarantined for the entity under a legally enforceable arrangement (Section 24).
  • Stocks must be stored in Australia, meaning on land, or on a vessel in an Australian port, moored waiting to enter an Australian port, or travelling directly between Australian ports, or in circumstances prescribed by the rules (Section 21).
  • Stocks must not be excluded stocks, such as those for exclusive defence force use, wholly private/domestic use (unless specified by rules), or stored in service stations, retail stores, personal vehicles, road/rail tank cars, seagoing ships (for powering), or pipelines (unless specified by rules) (Section 20).
  • Measurement Standards: Excluded stocks also include those that do not meet standards (if any) prescribed by the rules (Section 20(2)).
  • Record-keeping: Maintain records of all legally enforceable arrangements (Sections 23©, 24©) that meet requirements prescribed by rules (Section 26), which may include conditions on the nature of arrangements, parties involved, and potential registration with the Secretary.
  • Reporting Requirements: For stocks held under a “held, reserved or quarantined” arrangement (Section 24), the entity must give reports in relation to the stocks under the *Petroleum and Other Fuels Reporting Act 2017*, for the covered activity of holding stocks of a covered product.
• Notice of MSO Activity: A regulated entity must give the Secretary a written notice in the following situations:
  • If it is not subject to the MSO but intends to undertake an MSO activity that may trigger the obligation.
  • If it is subject to the MSO and intends to undertake another MSO activity or cease an MSO activity (where Section 31 does not apply).
  • In any situation prescribed by the rules.
  • Documentation: The notice must detail the situation, any matters affecting the entity’s capacity to meet the MSO, and other requirements prescribed by rules.
  • Time Frames: Within the period (if any) prescribed by the rules for the specific situation.
• Notice of Intention to Cease All MSO Activities: An entity subject to the MSO must give the Secretary written notice if it intends to permanently or indefinitely cease undertaking all MSO activities related to the product.
  • Documentation: The notice must meet requirements and include information prescribed by the rules.
• Compliance Audits: If the Secretary suspects a contravention of the minimum stockholding obligation, the entity may be required to:
  • Appoint a registered greenhouse and energy auditor (either one specified by the Secretary or chosen from a list).
  • Arrange for the audit team leader to carry out an audit on specific aspects of the entity’s compliance with section 7.
  • Arrange for the audit team leader to provide a written report setting out audit results to the entity.
  • Give the Secretary a copy of the audit report by a specified date.
  • Inspection/Audit Requirements: The notice from the Secretary will specify the audit type, matters to be covered, and the form/details of the report. Affected entities must provide the audit team leader and any audit team members with all reasonable facilities and assistance for the effective exercise of their duties. The entity must comply with all requirements of the audit notice.
  • Time Frames: Audit report must be submitted on or before the day specified in the notice.
• Other Audits: If the Secretary appoints a registered greenhouse and energy auditor to carry out an audit of compliance with the Act or rules, the audited entity must arrange for the audit team leader to carry out the audit.
  • Inspection/Audit Requirements: Affected entities must provide the audit team leader and any audit team members with all reasonable facilities and assistance.
• MSO Compliance Plan: An entity subject to the MSO must prepare, and keep up to date, a written plan addressing matters prescribed by the rules and any other matters requested by the Secretary.
  • Record-keeping: Maintain the MSO compliance plan.
  • Reporting Requirements: The entity must make the plan available to the Secretary as requested or as required by the rules.
• Application for Fuel Security Services Payment (FSSP): A person applying for FSSP must apply in writing to the Minister.
  • Documentation: The application must include the person’s consent to repayment obligations under section 50, be in the approved form (if any), and meet any other requirements/information prescribed by the rules. Rules may also empower the Minister to require the person to give security to the Commonwealth for repayment.
• Reporting During FSSP Commitment Period: During a person’s FSSP commitment period, the person must give the Secretary reports.
  • Documentation: Each report must include information prescribed by the rules (e.g., to enable the Secretary to verify the person meets eligibility criteria) and be in the approved form (if any).
  • Time Frames: Reports must be given within the period prescribed by the rules.
• Notification of Events During FSSP Commitment Period: During a person’s FSSP commitment period, the person must notify the Secretary if specific events occur or are expected to occur (e.g., change to legal identity, change of refinery ownership, permanent cessation of refining FSSP fuels, or voluntary/involuntary cessation of refining FSSP fuels for more than 24 hours, or other events prescribed by rules).
  • Documentation: The notice must detail the event, be in the approved form (if any), and meet any other requirements prescribed by the rules.
  • Time Frames: Notice must be given as soon as practicable, but no later than 7 days for legal identity, ownership, or permanent cessation; 24 hours for voluntary/involuntary cessation over 24 hours; or the time prescribed by rules for other events.
• False or Misleading Information: A person must not provide false or misleading information in an FSSP application, report, or notice if it results in being paid an amount of FSSP not entitled to.
  • Action: Ensure all information provided is accurate and complete, particularly concerning eligibility for and calculation of FSSP.
• Assisting with Civil Penalty Applications: A person may be required by the relevant chief executive to give all reasonable assistance in connection with an application for a civil penalty order. Failure to comply is an offence.
• Monitoring and Investigation Powers: Authorised persons exercising monitoring and investigation powers (including entry, inspection, search, and seizure) may take, test, and analyse samples of any fuel or fuel additives on premises. Regulated entities must facilitate these actions.

Metadata Keywords:

Fuel Security, Minimum Stockholding Obligation, MSO, Fuel Security Services Payment, FSSP, Refineries, Fuel Supplies, Energy Policy, Australia, Compliance, Audits.

Publication Information:

Compilation No. 2, Compilation date: 14 October 2024, Act No. 65, 2021.

Agricultural Industry Alignment:

Beef & Veal, Chicken, Coarse Grains, Cotton, Dairy, Eggs, Fisheries, Forestry, Horticulture, Oilseeds, Pig, Sheep Meat, Sugar, Wheat, Wine, Wool.

Date Added to database:

This document was parsed and added to the database on 25-07-2025

URL:

https://www.legislation.gov.au/C2021A00065/2024-10-14/2024-10-14/text/original/pdf →