By BLAKE METCALF-HOLT

 

THE Strait of Hormuz remains closed, coming via conflicting reports from all sides of the Iran War, after a short period of it reopening close to three weeks ago (on April 17).

Despite this, domestic fuel prices across Australia, and more specifically in Gippsland, have begun to slide back to what was seen before the conflict in the Middle East took off.

Across the Latrobe Valley, most service stations have ticked back to around $1.80 for unleaded, even below that in some instances.

However, diesel still hovers around $2.50 locally, as the state’s agriculture sector continues to express its concern.

The strain on the economy over the last two months since the war broke out has been felt, as local leaders and members of Parliament propose avenues to combat rising inflation and the cost-of-living crisis.

Latrobe City Mayor, Sharon Gibson came out last week urging the state and federal government to put the prospect of producing oil from brown coal back on the political agenda.

“There is strong community backing for new energy opportunities in the region, and we have the natural resources and existing skilled workforce for this kind of innovation,” she said.

“Latrobe City, with its longstanding expertise in energy production, existing infrastructure for carbon capture and ample brown coal reserves, stands ready to mobilise key stakeholders to get the conversation started.”

The mayor believes that with the right support, the Latrobe Valley can help Australia achieve energy independence and fuel self-sufficiency, which would bolster the nation’s sovereign capabilities.

Big business has explored the concept of oil from brown coal within the Latrobe Valley in the past, but has ultimately not led to any enterprise being undertaken in the region.

Cr Gibson said this has come down to the practice not being deemed economical at the time and lack of government support.

“With current fuel shortages and price increases impacting families, farmers and industries, it’s time to revisit this opportunity with fresh eyes,” she said.

“At the same time, (this boosts) our regional economy, which will come under even further strain with the impending closure of the power stations in a few years’ time.

“With no clear end to the fuel crisis in sight, both state and federal governments need to open their minds to exploring innovative approaches.”

The Express reported in its April 2 issue that the Victorian Hydrogen & Ammonia Industries Ltd (VHAI) had abandoned a $2 billion project to make fertiliser from the Latrobe Valley’s brown coal (‘Diesel can come from coal, yet state government won’t budge’).

VHAI executive director, Allan Blood, signalled blame at the Labor state government, more specifically, Minister for Energy and Climate Change, Lily D’Ambrosio, and energy Loy Yang A operator AGL.

In discussion with the Express, both the state government and AGL did not wish to comment, with the owner-operator of Loy Yang A Power Station indicating it was not in discussion with Mr Blood, and the government distancing themselves from any private business arrangements between the two.

The state government remained staunch, ignoring any proposition made by the Latrobe City Mayor.

“Only Labor will invest in Victoria’s renewable energy future and put the Latrobe Valley at the heart of this,” a state government spokesperson said.

“The Liberals and Nationals tried to stop the SEC yet again, and their planned $11 billion in cuts will devastate the region.”

These sentiments were almost verbatim to what Ms D’Ambrosio implored when she stopped into the Delburn Wind Farm last week, which recently began construction and was visited by the Express.

The Energy Minister disappeared before any further questions outside what was being done at Delburn could be asked.

Last week, Nationals Member for Morwell, Martin Cameron requested a meeting with Energy Australia Managing Director, Mark Collette regarding the extension of Yallourn Power Station’s life beyond its fixed closure of mid-2028.

Cr Gibson said utilising brown coal during the fuel crisis wouldn’t mean discarding sustainability goals still in place by those in power. The Liberals abandoned its pledge for net zero by 2050 last November.

“Rather, it would be a commitment by all levels of governments to exploring innovative and diverse solutions to help shore up our nation’s fuel security for the long-term future,” the Mayor concluded.

Both AGL and Energy Australia did not offer comment when asked by the Express about this possibility, following Cr Gibson’s proclamation.

An anonymous source close to one energy company did suggest that a project like this would not happen overnight, requiring years of planning and mass expenses to fund.

According to the Australian Institution of Petroleum, average retail petrol price fell by 20.6 cents and diesel by 33.9 cents for the week ending April 26, 2026.

More closely, regional retail petrol prices dropped by 18.9 cents, as opposed to metropolitan areas, which has gone down by 21.5 cents.

Prime Minister Anthony Albanese has dismissed any possibility of a new tax on gas exports, as the federal government looks to support fuel imports amid the global oil crisis.

The Australian Financial Review reported that billions of dollars will be devoted to boosting Australia’s long-term fuel reserves at the Federal Budget on May 12.

Alternatively, the federal Coalition said they would more than double the nation’s fuel reserves to 60 days and deliver at least one billion litres of new storage through an $800 million Australian fuel security facility.

Since the war in Iran started, in recent weeks, federal treasurer Jim Chalmers hasn’t reported the number of days in reserve fuel Australia has.

In March, Australia housed less than 40 days of petrol, diesel and jet fuel – well below the International Energy Agency’s 90-day requirement of emergency stock.

The Nationals have also called on the federal government to take a look at whether the excess wine stored in Australia could be turned into ethanol to aid its fuel supply.

Leader of the Nationals, Matt Canavan and Deputy Leader of the Nationals and Member for Gippsland, Darren Chester met with industry leaders to address structural oversupply and rebuild demand.