Could Australia run out of fuel?

Welcome to Curiosities live here at UTS. Before we start, we would like to acknowledge theGadigal people of the Eora Nation, upon whose ancestral lands the UTS campus now stands. We would also like to pay respect to the elders both past and present, acknowledging them as the traditional custodians of knowledge for this land.

I would like to begin by welcoming our audience tonight. Thank you for joining us for a discussion on oil and shipping route disruptions as part of the Curiosities live event series hosted by UTS. Does Australia run out of fuel? If you're interested in the answer to this and other related questions, you've come to the right place. Tonight, we invite you to learn from and discuss with Dr. Sanjoy Paul, who's associate professor of management and supply chain expert here at at the UTS Business School. My name is Gerhard Hambusch. I'm also an academic in the UTS Business School. My research and industry engagement interests lie in finance, ESG and governance related topics. Tonight, I will be your that is the audience wingman to get your questions answered and to navigate our discussion from supply chains and oil to impacts on Australian consumers and businesses. Stand will be our expert ready to answer your questions. I'm sure some of you have started feeling the pain of increased fuel and other prices. So, it is time to unpack current events to help us better understand the complex world of oil supply chains and short-term and long-term impacts on consumers and businesses. Tonight, we aim to deliver to you, the audience, the following discussion highlights. First, we will talk about the shipping closure of the Strait of Hormuz, an important waterway for global oil shipping routes. We will then shed light on the impacts of this closure on Australian businesses and consumers. Third, we will also explore steps that can be considered in the future to improve Australia's ability to manage similar disruptions. And of course, most importantly, we look forward to tackling your questions that can leave that you can leave in the Q&A chat window as we move through the first half of the event. Please don't forget to leave your interesting questions so that we can then address them. Excuse me. So that Sanjoy can address them later. So let's dive right in and start with one important question. Sanjoy, can you explain to us what experts mean when they talk about supply chains? And of course, together with our audience members, I'm specifically interested in those supply chains related to oil. Yes, thanks Gerhard for these you know nice introduction and connecting our audience. So I would like to welcome them in this event. So yes, so when you're talking about supply chain then we need to explain how we are globally connected. So we all understand that it is a very connected connected world. Goods and products are not produced and consumed in the same locations. So that forces the businesses to transport materials and products from one place to another and form the chain of suppliers, producers, transports and logistics providers, distributors and finally retailers before it's coming to us. This structure is broadly known as a supply chain. But as we are interested to look at oil supply chain for Australia, I would like to highlight how it works. For example, we import crude oil and refined oil and crude oil is produced in some other regions of the world including Asia, American and Middle Eastern countries. And those oil, crude oil transported to refineries in both Australia and Asian countries for example in um Singapore, Malaysia, Japan, Korea. Then we refine we transport that refined oil to our well pump and from where consumer can buy it. So in short this is a brief summary how a supply oil supply for Australia works but if you d it down then we can little bit more understand about the complexities for example we import about 95% of our oil needs including refined and crude oil we import refined oil significantly which is about 80 to 90% of our demand. Those refined oil comes from many countries but most of them are from Asia. They are Singapore, Japan, South Korea, Malaysia, India. So you could see that our suppliers of refined oil located in different parts of the world still we are connected. So if you look at the other side we also import crude oil little bit process here locally and that can fulfill only 15% of our demand. So those crude oils come from Malaysia, USA, Vietnam, Brunai and other Middle Eastern countries. And after we import that crude oil, we refine them here using our two refineries located in uh Brisbane and in Geelong. So you could see combination of these crude oil and refined oil forms a complex network like dependencies on many other countries for crude oil refined oil and finally it flows through our transportation and logistic system until to petrol pumps where we buy it. So that's why Australian oil supply chain connect with multiple countries shifting routes for both of our oil needs and that's why the structure is very complex. Go ahead Sanjoy thank you so much for for getting us started here. So it seems like not only are we within a network of neighbors that we closely work together and also uh receive oil, crude and refined oil from them, but the difference between crude and refined oil seems to be very important. And what stuck out to me here was that you said lots of the refined oil needs to be imported and that we can only basically provide a smaller amount through local production. So I think that's we come back to this, but that really stuck with me. So thank you very much for getting us started here. So, let's now turn our attention uh to this waterway that we've read about so much in the news every day for a few weeks now. Um I had to Google it and a quick Google tells me that this waterway we're now talking about is about 167 km long and maybe between 40 and almost 100 km wide. Right. So, Sanjoy, can you please uh explain the role of this straight of Hormuz for the global supply of oil to us? Why is it so important? That's a very good thing to discuss because we need to understand the geography of it. As you said, it's a narrow wide waterway. So though we have a range of 24 to 39 kilometer of wide but we can use only 2 to 3 kilometer of it for transportation of ship. So that's why it's a very narrow waterway and shipping route and it is located between Iran and Oman. So both share the uh uh the Strait of the Hormuz. However, this shipping corridor is also used by other Middle Eastern countries including Saudi Arabia, United Arab Emirates, Qatar, Kuwait and Iraq to transport their oils and LNG mostly. Why it is important? Because the global energy defendency on this corridor is very significant. On average about 20% of global energy needs such as oil and LNG are transported using this coroner. Those middle eastern countries are the suppliers and other countries around the world are buyer. Some refineries buy them, some buy crude oil directly from them. So this is roughly around 20 millions barrels per day of oil and LNG get transported through that corridor. So that's why this corridor is very important for our global energy needs. In case of Australia, how much we dependent on them? So Australia has both direct and indirect dependency on this shipping quarter. directly very less 10 to 15% of our crude oil out of 100% crude oil we import from middle east. So it feel that okay only 10 to 15% of crude oil coming from directly from middle east may not be significant. However, if you look at our indirect dependency, we import most of our refined oil, 80 to 90% of our refined oil from our Asian refineries. Those Asian refineries they bring they import crude oil from Middle East countries. So that is why our indirect dependency is way too much compared to our direct dependency. So if you add them all together overall dependency considering direct and indirect for our energy need I would define it is very significant and critical. Not only that because of oil and and crude oil and refined oil uh coming from that corridor this shipping route is also critical for some other products for example prochemical products which are used to produce fertiliser such as urea. So our farmers depend on that urea and fertiliser too much to produce our fresh produce and that is why the dependency and on this shipping corridor is too much important for us and also critical because if something happened like the disruption we have seen the impact would be coming to us.

Thank you Sanjoy. This this really helps us to understand the critical role of this waterway the Strait of Hormuz uh in in the in the global context of the supply chains of oil. So I think uh I think that really allows us now to better understand the uh the importance of that area but also now the impact on Australia and let's start with Australian consumers if you don't mind. How how does this disruption of oil shipping routes impact Australian consumers? Because that's really what we're interested. I trust the audience is interested in that very question as well. Absolutely. How can you connect these two? The shipping way that you characterised in terms of its importance. I read that 100 chips per day went through there on a normal day. 3,000 a month. None of this is happening now. How do Australian consumers now are impacted? I think our audience can answer on that question as well. So they can feel the better about the pricing and shortages they can see. But I can elaborate a bit more about how we can be impacted and are impacted by this disruption. So roughly it is uh more than 6 weeks now. This shipping route is effectively closed as you said uh supposed to 3,000 ships passing through before this disruption. Now 10 or so. So effectively closed and we can say that nothing is coming from that route. It means no oil, no LNG for the other part of the world. So it has devastating impact on the consumers globally. No doubt about that because of the shortage and the crisis. It's very very devastating. But if we come to our consumers in Australia specifically, there are flow on effects as well. For example, if we can roughly defined it by supply shortage like 20% less for the global, it could be even more shortage for us. Global market reaction to price price gone up. We can see that. So this is something um uh we have been talking that price is a form of impacts but the most dangerous one is stockout like sometimes price go up we can manage with our you know savings and other critical sectors can manage it for a short time but if there is a stock out or critical shortage then it become a a problem and also consumer reaction during this time they react sometimes overreact and you know through panic buying to create demand surge and that is a problem for our overall system. So what we have so so far seen that increase in price of diesel and petrol no doubt. So this is the direct impact on us. But if we go deeper down on it, what is really happening? This increase cost of because because of this increased cost, farmer farmer farming cost will increase, production cost will increase, transportation cost will increase that increased cost of fresh produce, transportation and other products and services are likely to pass on to consumer. So businesses will not you know cover all of it. So they can cover it for product time but eventually it will pass on to consumers in form of price increase and also in form of a stockout because some critical products if we can't produce them because of these oil shortages eventually it will be unavailable for us and if I break it down for our consumer for the regional areas they are likely to be impacted. most because they have less options for public transport. This is something because our transport system cars and trucks rely on diesel and petrols and regional area. It is hard to fulfill demand or replenish you know oil in regional area. It take long time and there is a high chance that there would be chronic shortage there and in that form the consumer from there could be potentially impacted and interestingly I have seen some fuel s searches on some services like um uh queries and other form of services they started adding that fuel searches in it means that we started to paying more for our services. Eventually it will flow through on many other services not only ferries or buses. It could be our restaurant, our you know emergency services, cars, Uber, any other form of transportation we could see that could be you know impacted and ultimately we need to bear that extra prices or extra burden. Recently I was just reading a news article very interestingly that council are planning to increase rates because of their transportation cost increased like waste collection and management system and they started to you know impose that extra charge and pass on to uh the citizens. So this is something you could see consumer all coming to us flowing through us at the end of the day. So most significantly oil price is part of consumer price index. So the increased oil price and associated increased service cost can increase the CPI and contribute to inflation and we know the impact of it. more inflation, more interest rate rise and eventually it will bite all of us through that you know um damages happening in the economy. So cumulatively if you sum it up the impacts on consumer could be severe and cost of living crisis could be worsen. So because of this crisis and it would be for a longer time this is something I predicted. So uh it could be for month to year. We need to look out for these impacts and the disruption continues longer like the closure and you know uh uh if there is no shifting from that corridor the impact would be even more devastating and severe. Oh dear, Sanjoy that doesn't make me feel better tonight. I'm being honest with you. you explained to us the the direct consumer impacts um you know the the rising prices just last weekend I went to an all like a car-free island north of Sydney and I felt I could escape the fuel crisis but as soon as I went to the water taxi they asked for I I remember 15% or so extra fuel charge so exactly what you're saying is is now you know hitting all of us in different ways for example with respect to transport I think what I was also interested and you already touched on it was the impact on Australian businesses So you mentioned that you know transport businesses and other businesses will be will be facing these higher costs likely bringing them to the consumers who consume their services. Is uh is is that the impact that will be delayed then on the consumer because the businesses are still holding their breath as you say I don't think so. So if you see these uh six weeks of disruption and we already started feeling the you know pressure and higher prices and stock out the you know uh reaction to it. So, so what I feel that from perspective of transportation cost I believe uh it would be very soon to buy us significantly through the disruption through the increased price in all our all other services.

Fantastic for explaining this and of course it it doesn't uh help me now to uh to to see a a quick change of this if if we don't get the supply chains back up and running. By the way, I'm seeing from the audience here fantastic questions coming in. If I can kindly ask the audience to keep these questions coming after our short uh contextual introduction here, we will then refer to your questions and many of these I'm already burning to present but we'll wait to do this in a block um at the end. Senjo, um before we get to these questions, let's focus on Australia being part of the global community and some of these questions will exactly uh uh hit this spot. Can you explain how exposed Australia is in this current disruption? Are we relatively more exposed or vulnerable than other countries or maybe less? You explain to us how much oil comes from which part of the world on on uh just looking at the plain numbers, it sounds like a small amount is only coming to us from that region. So therefore are we in a better position and and can feel confident about this also for future shocks? Uh I think uh in terms of Australia's position I think Australia is very much exposed here. So I would say we are not in a good position unfortunately because because of our you know respond and you know preparation all impacted our position. So if I you know break it down bit further. So Australia has about 39 days of oil reserve of petrol and 30 around 30 days of diesel at this moment. But compared to other countries if you see we are sitting on the very lower side of the ladder. So for example our Asian neighbors Japan and South Korea have more than 200 days of reserve. On the top end, the Netherlands has 450 plus days of reserve of oil. Many European countries and developed nations, they have more than 100 days of reserve of oil. Even our neighbor New Zealand, they have more than 85 days of reserve. So that positioned us and exposed us too much to this disruption because we are not in a good position to respond it. I know and take time to respond it. In my opinion, our reserve is too low to respond to this kind of crisis. We need to understand that both crude oil and refined oil deliveries takes weeks not days. So if you place an order and with with from any any refineries or any any uh you know source countries for crude oil it will take few weeks. So it means we need to plan few weeks advance but we only have around 39 days of reserve. It means a delay which is common in this you know situation in the world. A delay of one week just one week could have been devastating and impact our uh you know entire oil supply significantly. So that's why I believe we need more preparation, more understanding and increase our oil reserve significantly. Thanks Sanjoy for for showing this out so clearly here. When I read the first time the the 30 plus days in the news, I felt quite confident, right? like 38 days sounds great, like more than a month, plenty of oil, plenty of fuel, plenty of uh resources around. But as you compare it now with our friends, for example, in Japan or Korea, South Korea, more than 6 months, uh the Netherlands, I just typed it in my my calculator, 450 days, 15 months. They seem to be the variance seems to be great uh in terms of the uh the cushion that is available to each country. So I hear your your concern about maybe uh 38 days not or 39 days not being complete. Once again thanks for for pointing this out. So what comes to my mind now is before we get to questions and we probably have a couple of more points to talk about audience please keep these questions coming. We have a great list already. Um what comes to my mind is how can we prepare ourselves in Australia better for such shocks related to oil in the future? What can we manage? What can we do to better manage these shocks? Shell such a shock you know come come around again say the year after next or even next year. What can we do better? Which steps do you foresee? Yeah. So it is an important aspect and policy start you know matter as well because we need to rethink about what we are doing how much we exposed as we explained and accordingly we need to act. So in this situation as per future shocks as well we can consider both short and long-term strategies like we need to prepare and develop something in the short term to you know react or respond to these immediate crisis maybe we can work from home avoid unnecessary troubles you know utilizing government rebates on public transports you know go on public transport travel using public transports not having panic buying or something like that, you know, not overreacting. Those are the measures will help to release some pressure on oil consumption because if we can release those oil consumption, we can pass that savings to our other services like agriculture, emergency services, waste collection. Those are the businesses. they need more oils than individuals because at the end they will provide services using those oils and if their services are impacted ultimately we will be impacted. So that's why we need to understand that uh what we can do as a consumer and not overreacting to the situation but this is not our target as as a country. The country is we need to think for the long term. We must rely on less oil because lower demand will decrease the impacts of future shocks. What we can do to in in in the long term as we see we have reserve of around 40 days or 39 days. We should try to improve our oil reserve. This is the first task for 90 days as said by the international energy agency more would be better. Then what else we could do? We should try to diversify our crude oil sources from different regions and connecting to improving refinery capacity here so that we can have diversification of oil sources, crude oil sources and local refinery for you know producing refined oil because our local refineries can only produce 20% of our demand. So that's why we should build up more costefficient refineries here to compete with the world. Further in the long term we should target mass adoption of renewable energies and electrification of transport, logistics and other critical manufacturing sector for for example agricultural equipment. It will help us to less rely on oil. I believe using these cumulative strategies and you know restructuring our policies we can better respond to this kind of crisis in future. Thank you very much Sandroy for pointing out the short-term measures that can perhaps be put in place that relates maybe to our everyday lives and each of us could make those choices rather probably ad hoc or more easily than the long-term suggestions you had. Um now tell us since you started I'm trying to now come full circle before we come to a fantastic list of questions. We started by learning from you about supply chains what they really mean from the experts point of view to our daily lives. Um in that sense since you started by explaining to us the role and importance of oil supply chains for consumers and businesses. How can these supply chains react to changes such as the changes you described including also maybe electrification and the other suggested changes that you had? Are supply chains able to adapt quickly or not so quickly? What will be the the difficulty and the challenge when it comes to to this? Okay, so that's a very good question in supply and perspective. So before that I would like to highlight that there were warnings of this disruption. Many analysts warned in the last couple of years about this disruption. Even I wrote a media analysis in last year July in the conversation suggesting alternative plans and preparation needed for our energy security. Australia should have been prepared better but that did not happen. So, so that's a very unfortunate things but I want to emphasize here that we are not going to run out of oil because the other part of the oil supply chain is still working. So that's why we always say that supply chain always adapt and replan when there are changes in the system. But this adaptation and changes become easier if we all prepared with alternative plans and mitigation strategies. I believe that kind of adaptation we need to look forward in the future. Fantastic. Sure. So I think we now have a good basis to address our audience questions and a nice number of questions has come in. I will try to address them by uh in um in the order of the votes that other uh audience members have assigned to these questions. So, thank you very much for your engagement and for the questions themselves. And I would like to just one more time remind ourselves that our focus here is on explaining basically the the impacts on businesses and we we're we're trying to stay clear of any political questions that are clearly outside of today's event. But I think we have a good framework now to work with thanks to Sanjoy starting with supply chains going through the impacts and ending with supply chains. And allow me to to start with the first question um Sanjoy that comes in here. I have to move the questions in the right direction. And I'm I'm going to paraphrase them to to keep uh them focused. So the Strait of Hormuz carries around 20% of global oil supply roughly 20 million barrels a day. Where does the other 80% come from and what would it actually cost to diversify supply chains away from that 20% risk? This is a fantastic question Sanjoy because it allows us now also to to work with the flexibility agility of of supply chains. Maybe you can uh take this question first please. So yeah, so if you see the other 80% it is you know around the globe. So including African countries, American countries and Asian countries. So we have all continent contributing to this crude oil. So Mexico, America, Canada, Nigeria, from Africa and other countries from Asia, Malaysia, Brunai, they produce crude oil. So that's why other 80% are not isolated in some part of the world. It is distributed throughout the world. So that's why I'm very confident that other 80% of the supply chain is still working and we are not going you know run out of fuel uh you know in near term. So so that's why yeah so crude oil has diversified sources around the world. Would it be easy to diversify to change their supply chains towards the other 80% to stay clear of maybe this geographical area that that perhaps could you know repeat a similar problem? uh you know supply chain has a has established structure for example for us we buy refined oil from Asian countries most of our refined oil 85 to 90% and we bring import little bit of crude oil so when there is a change needed it's hard to change this structure because of the complexities and involvement of multiple parties multiple parties means you need that shift shipment, shipping, you know, services. You need to source crude oil from somewhere else. You need to organize your refineries and then finally you can use that oil after refining it. So it is not a easy not an easy task to change the structure immediately. It needs lot of preparation alternative plans and you know having diversification of our you know sources. So having diversification will help you to work on better and you know source crude oil more effectively easily quickly to respond to this crisis. So if we knew that this crisis is coming we may have contacted some of our cr crude oil suppliers in African countries or other Asian countries to better manage it. So this is kind of scenario planning we need to make sure that we have backups. We know where to go and we know that if we go there we can access our need. So this is something is important. That's why preparation through scenario planning is very crucial for any supply chain because we need to plan and replan our supply chain. So, so, so that part of adaptation as well because when you have are prepared when you know who are your friends who can supply you can better restructure it quickly but if you don't have the that plan that restructure become very complex and sometimes infeasible. Thank you San Jo. So the importance of planning, it relates to the long-term steps that you that you earlier laid out and it seems to be important that that a that a significant amount of planning is put into place to perhaps change the supply chains as they are at the moment. Allow me to then add um a very practical question here that came in from the audience. Uh when refined oil is imported, where does it land across the country or just in Brisbane and Melbourne? And maybe I can add to that, Sandro. Maybe you can you can also talk about the maybe the cost effectiveness of our ability to do refinements to crude oil. Are we competitively set up there? Do we need better setups? This relates to the idea, you know, where does it come in? What do we do with it? So take it away. So in ter in terms of refined oil, it's coming throughout the Australia like uh everywhere where we have the distributor and wholesaler and through retailers. However, in terms of crude oil which fulfill our 10 to 15% of demand, it comes to two locations. One in Brisbane and other one is Jillong because we have refinery there. So when we bring crude oil, we need to refine them and those refineries are located in only in two locations. So definitely they going directly over there. But refined oil, it comes everywhere in Australia. And in terms of our ability to to do the refinement services here in Australia, are we Yes. So we we have closed some of our refineries before mainly due to cost effectiveness you know uh it's very expensive and you know we can't compete with our our uh you know competitive refineries in Asian countries. So that's why we close them but we use some of them as import terminal like when oil's coming uh that terminal that um refineries are used as to handle those shipment coming from other countries. So currently we have only two active refineries but to make it more effective we need to focus on how can we produce or refine oil in in a cost effective way otherwise we can't compete with our cost effective refineries in other countries. So if we refine here and become very expensive what is the point? There is no point. So that's why it is important that we build up those automated refinary systems. I am not a technological man here. I don't know about those technologies. But it is possible as other countries did. For example, Singapore did then we can do that. Those technologies are may not be a rocket science. Those are available. So we can bring them and you know produce in a large volume to uh uh make it more uh cost effective and that way we can respond better to the crisis. Excellent. Thanks Sanjoy for connecting the engineering and also the economics of this while in the business school we are neither engineers but we do have an idea about the economics. I I take your suggestions as some that that should be the basis for maybe a future discussion here. Let me uh continue with another question and I'm I'm encouraging the audience to submit additional questions. We have still some space uh tonight. So uh I have a question here and I'm paraphrasing it again. Hi Sanjoy. Regarding the new government advertising campaign telling people to save fuel, do these public campaigns telling people not to waste fuel actually make a measurable difference in a crisis or do they risk creating more anxiety and unintended behavior like stockpiling? I think this is an excellent question as it relates to your short-term suggestions and can this backfire on us if people you know start doing the panic buying like we experienced in the COVID pandemic with toilet paper. I've seen canisters being f being filled sorry being recharged at uh at petrol stations and I could tell that at a petrol station these days there's a bit of a tension in the air. my friendly Australian uh neighbors and and uh co- community members are are getting a bit upset about the the petrol prices. Do we see bad behavior? Is this encouraging bad behavior? Is this backfiring? The the question is a great one. Yeah, I have seen reports on panic buying. So so there were few incident but the government role is creating awareness among the consumers that we are not going to run out of fuel. you need to behave responsibly. The question is is that actually working? I believe so because there are we know that many of our consumers are very responsible and they behave positively and react well. But there are few other consumers they could overreact and respond you know through panic buying and stockpiling oil. I think that number is not too much. So that's why it has those advertising and promotion has a big role to create community awareness and I am a big fan of that. I believe those kind of advertisement and promotion works very well for for our consumer like us educated consumers who understand well still yes there is a risk that that could create you know psychological pressure on some consumers and they could overreact but overall it works positively. So my suggestion would be not overreacting or panic buying because we need to consider others and other critical services. So that's why if we can be more responsible and better you know respond to this crisis through not panic buying and you know when we need then we fill our you know cars and other things then I think it would be better but yes it is working and allow me to attach another audience members question here that also relates to the panic buying how much is panic buying contributing to the crisis as it happens does it does it have a big impact Do you think is it is it spreading like a wildfire? I'm I'm just referring back to the toilet paper days of Yeah. Yeah. So it not like that. I can say I can say that it's not like toilet paper we have seen in during the covid 19. So it's not a toilet paper. So uh how much contributing is hard to evaluate at this stage because we we I haven't modeled those using numbers and other things. But I can tell you that supply chain works on supply and demand. So we know that our supply chain is struggling very significantly at this moment because of supply shortages. Even a little bit panic buying from a significant number of consumers could make a devastating impact on that because our system is already struggling. So that's why how much we don't know but we have seen out of stock to many of our browsers like fuel pump farms and station in both metro and regional areas and that I believe many of that things came through panic buying in regional areas. I know that many many uh consumers and businesses they stockpiling it. I'm okay with if if a farmer stockpile them I'm big supportive of that but if a consumer buy few gallons like you could see uh in Bunnings there is a shortage of gallons so this is interesting fact that you could connect that Bunnings has shortage of gallons it means a number of people they buy bought them and they use those gallons to stockpile and if it is not significant But still it influence those things that we have having out of a stock in some of our uh you know station uh nationally. Thank you Sanjor and there's a question that relates to this straight away and it speaks to us loudly. I want to provide that question to you. It's a new question that came in San you're helping us tonight by engaging on behalf of UTS with the public. Uh we love to engage with the public. We love to advance knowledge with impact in discussion with the public and this question is exactly aiming at this. The question is do you think academics and industries should work together to educate consumers to behave wisely in this kind of situation and how could we probably achieve that? Yeah, I could add more. So it's not only businesses and academic, it should be government as well. So these three parties should work together and you know creating awareness among consumers how to behave, how to react in in this kind of crisis. Yes, we as an academic as is saying that it's a it's an impact we would love to do that. So I am trying to do that through you know writing in the media for general public how they should react how they should behave. So this is something maybe contributing very little but if you can do it collectively by you know including our businesses and government in a in a in a in a a greater scale I believe the impact would be more and consumers would be more uh you know award about this situation and will behave more appropriately. Great. So, so there's definitely a space for this on the research side to better understand consumer behavior and then of course on the policy um ad advice side I would like to be careful to maybe find find ways of allowing consumers to understand the the effect of their doings for example when buying canisters and filling them with with fuel at the petrol station. So I think that there's definitely room for that and we hope that tonight's discussion of course can contribute to that. Allow me to now since we mentioned the word policy. We're not policy makers here. Um but there was a question that came in and I would like to touch on this. Uh it says do you think restrictions will be imp implemented for fuel? If so, what do you think will be the tipping point? And the the question writer did not tell me what tipping point. I mean probably relates to the extreme one I believe. I I I leave you to to uh interpret this. It could be meaning you know when is this coming or if it comes what would make us consumers really upset about it. I I don't want to interpret it in a wrong way. So that's a good question in terms of restriction. So if you see here this increased price already imposed the restriction because some of our consumers and people they trying they are using alternatives like public transports and avoiding unnecessary travels working from homes. So this is a form of restrictions but government has four level of restriction. as at this moment we are level two. It means there is no formal restrictions but I don't believe that we'll have you know another further extreme level of restriction because uh supply chain is adapting changing and coping up with this situation. So it means we'll see uh you know improvement slowly maybe slow but we'll see improvement. So that's why I don't expect any extreme point or tipping point to impose further restriction. But if does it if does if it happens then we'll see restriction in forms of how much quantity you could buy. So this is something could be the next things but I don't expect we will be there. Okay. Thank thank you Sanjoy. And that that gives hopefully us some hope that we're not going to be told what to put in terms of fuel into our vehicles hopefully. Um let's switch a bit gears because we we talked about the waterways and the importance of it and we learned you know how much petrol gone through there but uh the waterways you may have mentioned it before are also important for other goods that are critically important for other industries. And so here we have a question. I'm going to uh read out the question and I'll let you then answer it and provide the background knowledge to it. What is the position of petrochemicals? Are our farmers worried about fertilizers? When should we expect shortages in fresh produces? That is the natural reaction to this, right? Yeah. So, yeah, petrochemicals are, you know, element of of those uh uh products that used to produce fertilizer. So this is something I believe very crucial part because we rely on middle countries for 50% of our fertiliser. So this is significant number if you see here. So uh if you see fertilizers coming from uh UAE is significant and also we import fertiliser from China. So the problem is here if China gets hit from the shortage of those petrochemicals and fertilisers they could impose you know restriction on exports and that could be the be a devastating point for our farmers because we need those fertiliser especially ura we dependent so much on on those countries. So winter season is coming. So farmer are preparing for their new plants and you know uh uh they their plan for subsequent seasons as well. So I believe the winter season would be very crucial for us to overcome this crisis because that is the immediate one we could see how farmers would be impacted from that fertiliser shortage. So uh my suggestion would be here that uh if they stockpile enough if we had reserve of fertilizer if we can have other sources I don't have enough study in this context because fertiliser is a different one maybe we could respond to that shortages uh in a better way. Thank you San Joy and that that makes clear that the waterways we've talked earlier today about are important for not only oil but also for example about fertilisers with big big flowing effects and on for example agricultural production which is of course important again to plan I guess ahead. So since since you mentioned agricultural production maybe we can uh also talk about electrification for a second. Um you and I are member of the UTS Center for Climate Risk and Resilience. And just recently uh in connection with the Institute for Sustainable Futures here at UTS, we had David Horchield visiting from California. He's the chair of the California Energy Commission. And he was able to to show to us what California is doing. Um and explained to us that not only is California the fourth biggest economy, but they've been making big advances in electrification of the economy. My question to you is when I think of agricultural production that we just discussed that is also impacted. It is almost impacted at least in two ways. One was the fertilizer discussion you just presented. The other one is if I'm not mistaken most of the farming machines that I have on my mind are are run by fuel by diesel or by other petrol resources. So could you explain to us and maybe we can take the agricultural he has a hook to understand more about electrification and reducing the the dependency on oil. Yeah. What can what can Australia do about electrification? Would would it help us to uh to solve this crisis or at least future crisis if we we are better? Yeah. So that's a good example of agricultural equipment. We use harvester, tractor, irrigation systems. Currently those are mostly operated by diesel. So if we can you know make it electrification like electrifying all those equipment through EV, electric vehicles, electric truck, electric harvester. I know it is still in experimented phase but I believe that that adoption should be uh you know speed up to make sure that we can electrifying those things uh those equipment quickly. So if we can electrify those uh uh you know uh equipment I believe they would be less rely on reliant on oil. So this is one kind of release of pressure or tension they currently having. So this is one aspect. Second aspect is not only those agricultural equipment our transportation sector overall. So currently our 99% of freight truck operated by diesel. So there is a big scope of improvement if even if we can slowly make our transportation system through electric truck you know uh convert them to electric truck replacing them slowly I believe the pressure on diesel would be reducing so that's how slowly we will in the future if we can continue to do it uh we can have some less pressure on oil consumption so as you given the example from California, not only in California, in Australia, in Melbourne, we are experimenting electric truck uh you know in terms of you know how we can make them on the road and you know have better efficiency and having less oil consumption. So that's why we are going to submit um some of the grant uh to the government and government should support it because we need that future freight system that can be done through the electrification and I believe that is a point we should focus on making as much as possible and electrifying them and become less reliant on oil. And maybe maybe Senro thank you for for showing this and explaining this to us. Can we take it also to the consumer level? For example, for an ordinary Australian watching tonight and listening to the conver conversation here, what do you think is the single most useful thing they can do to reduce their personal exposure to fuel shocks? I'm I'm playing on the word electrification. We've read in the news, you know, people think maybe of vehicles. There's other electrif electrification opportunities in the household. Um what is your view on how can Australian consumers respond to that maybe with big decisions in their life because as we know a vehicle is no no small decision to make but uh maybe you can comment on that too. Yeah. So I don't expect that that transition would happen in overnight. So this is not my expectation but I said gradual transition like uh electric vehicles is an option. I believe we are also experimenting hydrogen car. So this is something would be in in I don't know how far we are but uh would be in a very long term we could see hydrogen car as our alternative fuels or you know uh uh energies as well. So consumer can help in that aspect that as much as using you know electric cars transitioning towards you know uh electrification of our system and also uh our public transports need to be electrifying. Not only we have buses and other form of transportation fairies those are not still um they run still on diesel. So there is a biggest scope for improvement. So consumer, government and you know private sectors they can work together to make it happen. That uh that uh resonates what David Hield said and I'm just referring to California because it's such a big economy. He said that the every public school child child child in the city of Oakland across the bay of San Francisco is driven by an electric bus basically to school and back and these buses also then support the grid and we don't want to uh now mentioned too too many details about the engineering details but um I found that interesting that maybe communities uh and also governments can learn from each other maybe to to transition into this electrification world that then reduces the demand for oil therefore the the dependency on oil. really like that. So that's why that's why government is giving now rebates or some support when they buy you know electric cars, electric vehicles. I believe NSW government is also giving subsidies if any business want to buy electric vehicles from $5,000 to $50,000 if it is a big truck you know electric truck. So this is a good thing that uh you know policy makers are thinking about our future and that is our future. It's interesting uh just like you have children at home. So I I I thought I'd play with my 5-year-old son for a minute and ask him if Australia runs out of fuel what shall we do? And he looked at me he said papa we do electric then right? There was a natural reaction. I'm not saying he's he's trained or understanding the background. It was just an interesting interesting point. There's another question from the audience. Um, and this relates to also the things we can do and it's probably one of our last questions here. Um, we see how the schedule goes. Um, this relates to our personal behavior and perhaps the uh the employee employer relationship and the way we we do work. Uh, so if the government imple implements a 4-day work week, could this negatively impact the overall economy? That's interesting. I'm guessing the 4-day work week implies also that we don't have to drive 5 days into the office. There's many topics that connect to this question. Working from home, I can work 5 days from home or 3 days from home or one day from home. But I think this question aimed at the idea and there's some research done in the business school to this would this negatively impact the economy because we're working only 5 days uh for for many reasons. Um, and also we don't have to drive into the city uh or wherever we live for one day. How do you see the the uh the trade-off here of benefits and costs of of such a relationship? And once again, we're not policy makers here. We're just trying to respond to our audience's question, of course. Yeah. Yeah. I have been you know reading some of these news related to four days a week days in a week and I found I found that had lot of attention to public and you know and also businesses as well. So I'm not sure because I'm not expired of what would be the impact on productivity or other things of this four days a work uh you know four days of work week. So this is something I can't comment on that because this is not the things but I can comment on that if 4 days a work it is mandated if it is mandated it would help to save oil consumption. This is a very direct relationship I love the answer because that is exactly what we try to do tonight. We try to keep it uh in the in the scope of what we're trying to achieve tonight. In the interest of time, as I know some people may still be at work or they may be at their working from home office desk or they may already had dinner or not or they have children like myself waiting downstairs. We do respect our schedule. I would like to perhaps close the event at this point by thanking you Sanjoy for a fascinating and timely discussion we had here. I know you're a busy researcher right now. you you explained the grand projects you're involved and from our personal prep discussion I know that uh Australian Broadcasting Corporations and others are chasing you to get onto their screen. So thank you for your time. Most importantly, of course, we thank you, the audience, for your thoughtful questions, for your attending, for you attending the event that really shaped the conversation and allowed us to revisit those points that Sanjoy made. And we hope that we have contributed to this. And of course, you can continue exploring this topic in our Curiosities video series at UTS. There will be also a variety of outputs coming from this discussion. Once again, we thank you for joining us and wish you have a great evening and we hope to see you next time when we have another Curiosities live event here at UTS. Thank you and have a good night. Be safe.