By Rhiannon Hoyle
Western Australia will set up a strategic diesel stockpile separate from Australia's national reserve, to help secure supplies for farmers and remote communities in the country's largest state by land area, officials said Tuesday.
The state government has signed a deal with fuel supplier Cambridge Gulf to buy and store 4 million liters of diesel in the Kimberley, a vast and remote region in the north of Western Australia, officials said in a statement.
The government is considering additional purchases, with up to 12 million liters able to be stored at the facility.
The decision to establish the diesel reserve--the first such state stockpile to be developed in Australia--follows concerns about acute shortages of fuel, said Premier Roger Cook.
"It's diesel that will be 100% state-owned and reserved for those who need it most, such as remote communities and the agriculture sector, allowing us to act quickly when we need to," Cook said.
Remote Aboriginal communities, farmers and some other key industries rely heavily on uncontracted fuel volumes, the statement said.
Fuel prices have surged as conflict in the Middle East results in blockades of the Strait of Hormuz, a vital thoroughfare for nearly a fifth of global petroleum supplies, sparking panic buying across Australia.
Canberra last month released 20% of Australia's national gasoline and diesel fuel reserves from private-sector stocks to help ease shortages in parts of the country. Western Australian officials said the state stockpile is intended to complement Australia's national fuel reserve.
Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com
(END) Dow Jones Newswires
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