Australian arrival cap to weigh on jet fuel demand

Australia is halving the limit on passengers allowed into the country from 14 July to ease pressure on its quarantine system following a flurry of Covid-19 outbreaks, which will further weigh on jet fuel demand.

Australia's national cabinet agreed to temporarily reduce the current international passenger arrival cap by 50pc from 6,070 to 3,035 a week, to manage the pressure on quarantine facilities because of the increased risks posed by the delta strain of Covid-19. The national cabinet comprises Australian prime minister Scott Morrison and the leaders of the country's states and territories.

The tighter restrictions will remain in place until 31 August and be subject to frequent reviews, Morrison said. The volume of inbound and outbound international flights from Australia have collapsed from pre-Covid-19 levels. This has resulted in a slump in jet fuel consumption, which is down more than 61pc in the first 10 months of the 2020-21 fiscal year to 30 June.

Returning Australians will be prioritised under the lower arrivals limit. Around 83.9pc of travellers to Australia last month were Australian permanent residents and their families, the government said.

A Covid-19 outbreak in Australia's largest city Sydney prompted the New South Wales (NSW) state government to today extend its lockdown until 16 July. Residents are encouraged to remain at home and not commute to work if they can avoid it, which will weigh on transport fuel demand. Travel from NSW, the most populous state in Australia, to other states has been restricted particularly for people living in the greater Sydney metropolitan area.

But Victoria state plans to lift Covid-19 restrictions in its state capital Melbourne tomorrow. Queensland has ended its three-day lockdown, while South Australia this week eased curbs imposed on 28 June. The Northern Territory plans to lift restrictions imposed on its capital Darwin on 9 July, while Western Australia has also eased restrictions imposed in its state capital Perth.

By Kevin Morrison