Treasurer Jim Chalmers says renewable energy is answer to fuel crisis as Anthony Albanese visits Singapore

Treasurer Jim Chalmers has declared renewable energy from biofuels is the answer to the global oil crisis as his boss Anthony Albanese visits Singapore to secure supplies from Australia’s biggest source of imported fuel.

An uncertain two-week ceasefire between the US and Iran, announced on Wednesday, has so far failed to reopen the Strait of Hormuz, where a fifth of the world’s crude oil transits.

Almost six weeks into the Middle East conflict, Dr Chalmers said he found it “bizarre frankly” there were critics of renewable energy as he announced a series of pilot projects in Victoria, South Australia, Western Australia and NSW.

“They fail to understand that cleaner and cheaper energy and sovereign capacity are not just environmental or economic issues, as important as those things are, but also national security issues,” he told reporters at Melbourne Airport on Thursday morning.

“If we’ve learnt anything from the last month and a bit, it’s that cleaner and cheaper fuels, sovereign capacity, refining, manufacturing, these things are more important than ever in the context of this extreme pressure that we’ve seen on our global supply chains. That’s why we’re big believers.”

Dr Chalmers has also taken aim at US President Donald Trump, blaming him for “unpredictability, uncertainty and volatility in the global economy”, with Australians seeing a big surge in petrol and diesel prices since early March.

“Obviously, these were decisions taken around the table of the Situation Room in Washington DC, but Australians are assembled around their kitchen tables working out how to pay for it,” he said.

“Australians didn’t choose the circumstances of this war.

“These decisions were taken in the first instance by the Americans, but Australians are paying a hefty price for that.”

Crude oil prices are back at $US97 a barrel, moderating from record highs above $US100 a barrel, after the US and Iran agreed to a two-week ceasefire in a bid to resolve Iran’s blockade of the Strait of Hormuz.

“We saw some welcome developments yesterday with the announcement of the ceasefire, but we need the ceasefire to stick and we need the Strait of Hormuz to be open in order for the recovery to begin,” Dr Chalmers said.

“We are cautious about these developments. We’re not complacent about these developments because we know, first of all, we need to see the Strait of Hormuz reopen, we need to see the ceasefire stick and we also know that the consequences of what we’re dealing with in the Middle East will hang around for a while yet.”

Mr Albanese embarked on a two-day visit to Singapore on Thursday to meet the city-state nation’s PM Lawrence Wong.

Singapore was last year Australia’s biggest supplier of refined unleaded, shipping over 55 per cent of petrol imports.

Overall, Singapore supplies a quarter of Australia’s imported fuel needs and is the second biggest provider of diesel after South Korea and the second biggest supplier of jet fuel after China.

Motorists are starting to see some relief at the bowser eight days after fuel excise was temporarily halved to 26.3 cents a litre for three months.

A deal with the states and territories to return GST revenue to motorists takes that relief to 32 cents a litre until June 30.

Average unleaded prices in Melbourne have fallen to $2.25 a litre but diesel is still selling for $3.19 a litre in capital cities, because its wholesale price has surged by 55 per cent since the US strikes on Iran, compared with a 38 per cent rise for petrol.

Transaction data from National Australia Bank customers shows fuel spending has soared by 53 per cent since February, as consumers spent less on other items in a sign the global fuel shock will squeeze other parts of the economy.

The Federal Government on Thursday announced four projects had been chosen for its Investor Front Door pilot program focused on renewable energy.

They include HAMR Energy’s renewable fuel projects in Victoria and South Australia converting biomass waste into carbon liquid fuels; Ardea Resources’ Kalgoorlie nickel project; New Energy Transport’s Wilton project in south-west Sydney to develop zero-carbon electric freight trucks; and Murchison Green Hydrogen’s project in Western Australian producing large-scale ammonia from wind and solar.

With an economic slowdown looming, as a result of the worst energy shock since the 1970s, Labor is under pressure to reduce spending that could fuel inflation ahead of the May 12 Budget.

But the Climate Council on Thursday called for the Government to extend its Electric Car Discount, now under review, that enables employers to provide an electric car worth up to $91,387 without having to pay fringe benefits tax.

“Every additional EV reflects permanently lower oil demand, and more fuel available for those who still need it,” it said.

It is also calling for the phasing out of the diesel fuel rebate, even though soaring fuel costs threaten to push up food prices.

“Credits above this cap should be redirected to support the uptake of zero-emissions machinery, unlocking billions of dollars in Budget-neutral support for energy security,” it said.