Australia’s parliament has passed legislation empowering the country’s export credit agency to physically buy, stockpile and sell fuels alongside critical minerals including rare earths, as the country suffers energy shortages triggered by the Middle East conflict.

Prime Minister Anthony Albanese’s administration had announced its intention to establish the critical minerals reserve in January. However, as global energy markets were upended owing to the US-Israel war against Iran, the labor government added into the draft legislation capabilities to acquire and store fuel.

The move comes as gasoline and diesel prices at the pump have surged to records across Australia.

Panic buying has boosted demand — especially in rural areas — and led to some service stations running out of fuel, prompting the government to roll out measures such as halving the fuel excise and reducing charges on heavy vehicles.

The new laws allow Export Finance Australia to add to the country’s existing fuel reserves, with government having allocated A$1.2-billion, or $831-million to fund the stockpile.

The agency is primarily focused on providing loans, bonds, and equity to support Australian businesses overseas, but its transformation into the government’s trading arm will now see its remit expand to buying diesel and gasoline as well as rare-earth elements to strengthen supply chains.

“The reserve would ensure Australia’s preparedness to address supply chain disruption of materials, goods or things, including fuel and other commodities, as a result of market volatility and geopolitical events,” a memorandum of the laws states.

The memorandum also says the critical minerals strategic reserve is intended to position Australia as a trusted and stable partner in high value, vulnerable critical minerals supply chains.

Critical minerals have been at the center of geopolitical and trade tensions in recent years as governments recognize vulnerabilities in supply chains. China, which dominates the market, weaponized exports of rare earths to Japan, amid rising tensions over Taiwan.

Canberra’s move also follows a landmark pact signed last year between Australia and US President Donald Trump to boost America’s access to rare earths and other critical minerals to counter China’s dominance.

A key objective for the reserve would be to establish a floor for critical-mineral prices, the government has said previously. That would help protect producers against future market slumps driven by floods of supply from China.