Industry News

Fuel prices threaten agriculture transport amid coming harvest

Better long-term national fuel security has been called on by NSW Farmers as higher fuel prices are set to take a toll during a tight harvest season.

It’s the latest hit to the grains and horticulture sectors, which have been crying out for better access to harvest workers for several weeks.

While farmers are frantically trying to find labour, they have also been burdened with having to secure fuel before the price blows out.

Across the country motorists and industries are paying more for petrol and diesel due to rising global oil prices with Singapore Mogas closing at almost $US100 a barrel recently – up from $US84 in July 2020.

NSW Farmers Grains Committee Chair Justin Everitt said Australia was particularly exposed to fluctuating world oil prices as there was very limited on-shore storage capacity.

The result was little protection for farmers, truckies and regional motorists from ‘bowser’ shock.

“We are severely disadvantaged as a nation with only two oil refineries with long-term operating certainty, down from four at the beginning of the year,” said Everett.

“BP closed its refinery in WA this year and Exxon Mobil will close its Victorian plant before the end of the year,” he said.

“After 18 months of this pandemic we’re still highly exposed due to a number of off-shore supplier dependencies. The Federal Government is undertaking a long process to establish large on-shore regional storage capacity, but in the meantime most of our strategic oil reserves are held on the other side of the globe in the USA.

“Country people have been highlighting this problem for years and now it’s really biting us at the worst possible time for harvest – not many workers, state border restrictions, and now running trucks and harvesters will cost more.”

The projected record grain harvest is getting underway in northern NSW, which will drive demand for diesel.

Everitt said the latest price hike was a bitter pill for all primary producers and contract harvesters who will see higher input costs – even more uncertainty for the farm sector recovering from drought, natural disasters and the restrictions from COVID-19.

“Insurance costs have gone up, fertiliser prices have gone up, and now fuel prices are going up,” Everitt said.

“Growers are also paying more to attract workers just to get their harvest started, and all of those costs could mean an increase in consumer prices for grain related consumables in the next 12 months.

“We need long-term planning and policy from all governments to take the handbrake off agriculture so we can get on with business.”

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