Interview with Tony Jones, 3AW

Tony Jones
AdBlue, diesel fuel, Urea supply

TONY JONES: There's a real shortage of unique anti pollutive additive for diesel engines, for trucks and, of course, family cars too. So many normal cars, if I can call them that, sort of rely on diesel these days. Now, this additive allows diesel engines to conform with emission standards. So makes dirty motors a bit cleaner and the bottom line is, we're running out of it. It's called Adblue, and our national freight supply chain relies on it heavily. In fact, there's a global shortage. It’s not just something we're experiencing at the moment. Neil covered this story of about a week ago. Ross and Russ spoke to the Victorian Transport Association earlier this morning. People are really starting to pay attention to this now. So is the federal government, so much so it started up a task force to really focus in on this. We're joined now by the Federal Energy Minister, Angus Taylor. Good morning.

ANGUS TAYLOR: Good morning. Thanks for having me.

TONY JONES: Well, thanks for coming on and it’s something we need to address, because I described it as a potential crisis. That's exactly what it is, isn't it?

ANGUS TAYLOR: It's not a crisis. It's important…

TONY JONES: I said potential. Potential crisis.

ANGUS TAYLOR: …look, it’s an important issue, there’s no doubt about that. And of course, if we did run out of Adblue, it would be a challenge for our trucks and many of our vehicles, and even my car is a diesel vehicle, so I understand the issue well but we've got over seven weeks of supply on the ground and supply coming into the country. We've got a significant amount of additional firm orders to our suppliers coming into the country. Supplies within the normal stockholding range, they're tight, there's no doubt about that, but within the normal stockholding range. What would cause a problem is if people went out and unhelpfully bought additional Adblue for their vehicles ahead of time. There's no need to do that. That would be unhelpful and unnecessary. There is enough stock. Now, it's true that across the world, as you rightly said, it's tight. And so we're working hard with other countries. We've been in discussions with a range of countries to get additional supply to make sure there is going to be no disruption in the future. We're also working with local manufacturing to see if we can get additional supply locally. And there's other potential solutions. So what- one thing I tell you we're absolutely determined to do is make sure that our trucks keep running and our motorists stay on the road.

TONY JONES: Well, I suppose what makes it a real concern - a real concern -  is your own media release, really, that says there are currently in excess of 15 million litres of Adblue supplies on hand, which is equivalent to close to five weeks of business as usual demand. Now, you do go on to say that there are shipments on the way, but that's only going to provide two weeks of additional supply to the market. So there is genuine cause for concern here.

ANGUS TAYLOR: But that's normal. These are normal stockholding ranges.

TONY JONES: So why have you set up a task force then, to try and look at it?

ANGUS TAYLOR: Because it’s at the bottom end and the gas prices globally, and this is made from gas, it's urea, it's like fertiliser, it’s equivalent of fertiliser. Gas supplies globally have been very tight. We've actually been in a much better position here in Australia than most countries in the world and so looking out into the future, whilst we have both stocks and firm orders out into February, our suppliers assure us the market is tight globally and we want to make sure we never get to a situation where there's a disruption. So it's very important that we can give people that assurance. That's what we're doing now but, you know, it's important to remember, these stock holdings are within the normal ranges. They’re at the tighter end, there's no doubt about that, but there's no need for additional buying. There is enough supply available. I should also add that the trucking companies have a lot of their own stocks that they hold onto, and that’s in addition to what I've just outlined. So the big trucking companies are well positioned.

TONY JONES: So why have you set up the task force then?

ANGUS TAYLOR: Well, because there is, globally, as you rightly said, a shortage and it's important that we don't get caught up in that, and that we can give people assurance. I mean, this is the key. People need to be confident, and they should be, that we are on top of the situation. We know how much is sitting in the supply chains. We know how many orders are on the way but the global shortage is something that I understand, might alarm people if they're not across what's going on here and so we are doing everything we can to make sure there is no prospect of future disruptions.

TONY JONES: My car takes diesel. Is this why I'm seeing diesel prices absolutely skyrocketing at the moment? I mean, have you got outlets actually cashing in on this shortage?

ANGUS TAYLOR: No. That's a different issue. So this Adblue, which is the additive you're talking about, is made from urea, which is actually made from gas. Diesel, of course, you know, comes through a different process but there's a broader factor going on here, which is there’s been a really strong surge in demand for energy coming out of COVID. Economies across the world have surged back faster than most people expected. There’s been under investment in oil and gas development in the lead-up to the pandemic and certainly during the pandemic and so markets are still responding, and we're seeing that happening now. We are actually seeing some more easing in oil prices across the world now, as supply does catch up but the resurgence of economies across the world as countries have come out of COVID has been extraordinary and has caught people by surprise, there’s no doubt about that.

TONY JONES: All right. So are you worried that this is going to become, you know, the truckie version of the toilet paper? You know, there’s there’s going to be a real rush on this? I mean, do we have to swing by the army disposals now and get our jerry cans, or…?

ANGUS TAYLOR: It's incredibly important people don’t do this. It is not necessary. It's also not helpful. I mean, at the end of the day, there is a lot either in the supply chain, or coming. Our trucking companies have significant stocks and buffers and we're doing everything to make sure there's no prospect of a future disruption, despite the fact that, as I said, prices have been very high and supply has been tied around the world. So there's no need for additional buying.

TONY JONES: All right. So you've got no doubt whatsoever that everything's just going to be going along swimmingly come the end of January and February and onwards, and we'll get as much as we need to try and keep us on the road, literally?

ANGUS TAYLOR: We are working to make sure there is no prospect of a future disruption, despite the tightness in global markets and, you know, I’ve put together a task force of the best to make sure we're across it, that we know exactly what the situation is, and we can take action. There's many actions we can take if that's necessary but, certainly, we're working to make sure that there is no prospect of motorists or truckies not being on the road.

TONY JONES: What about after this initial two-week supply comes? I mean, is there anything there? I mean, are other countries…?

ANGUS TAYLOR: Yeah, there’s firm orders. There's firm orders, our supplies are assuring us, out to February. So it's not as though the stocks that we have, and the additional close to three weeks of supply already on its way, is the end of it. Then there's additional firm orders on top of that.

TONY JONES: And they're guaranteed are they?

ANGUS TAYLOR: Yeah, they're confident. Our supplies are confident of that. 

TONY JONES: Confident or guaranteed?

ANGUS TAYLOR: What is necessary is just keeping a very close eye on it because of the global situation, as you outlined up front.

TONY JONES: Yeah, okay. Alright, then. Thank you for your time.


TONY JONES: Thank you. Federal Energy Minister there, Angus Taylor.