NSW could become the second state to set up its own diesel stockpile, as ongoing supply shortages push premiers to act independently of Canberra.
Premier Chris Minns confirmed NSW is actively weighing a state-based reserve after Western Australia moved this week to unilaterally purchase millions of litres of diesel for its own strategic use.
'We are going to look at it,' Minns said on Wednesday.
'We had a subcommittee cabinet with this issue and will make a decision about what strategic investments we can make here in NSW.'
Minns said his government is planning for all contingencies as global supply pressures continue.
'We'll see what NSW can do if we have to go it alone,' he said, while stressing the government will not commit to any plan 'straight away'.
Federal opposition leader Angus Taylor said it was a sign Prime Minister Anthony Albanese was no longer in control.
'The moves by Western Australia and now NSW show states have lost confidence in the Albanese government's ability to safeguard Australia's energy security,' he told The Daily Telegraph.
NSW could become the second state to set up its own diesel stockpile, as ongoing supply shortages push premiers to act independently of Canberra
Chris Minns (pictured) said the NSW Government was considering a state exclusive stockpile
'I've been clear from the start that fragmented, state-by-state approaches in the middle of a national fuel crisis risks making a bad situation worse, not better.
'When states are forced to scramble and build their own fuel reserves in the middle of a national crisis, it's a clear sign Chris Bowen and Anthony Albanese have lost control.'
The federal government rejects this, insisting state action complements, rather than undermines, the national effort.
On Tuesday, WA Premier Roger Cook announced his government had secured four million litres of diesel at a cost of $10 million to protect supply for the state's agricultural and heavy industrial sectors.
The fuel will be stored locally and used only if required.
Energy Minister Chris Bowen strongly defended Western Australia's decision during a tense on-air discussion with Today host Karl Stefanovic on Thursday morning.
Bowen dismissed suggestions of a 'feeding frenzy' between states.
'I welcome the efforts of Western Australia to secure a relatively small amount of diesel, but material for their purposes,' he said.
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Bowen (pictured) dismissed claims that the states had lost faith in the Albanese government
'That is states and the Commonwealth working together, and I think that is a good thing.'
When Stefanovic compared state stockpiling to 'Covid 2.0', Bowen pushed back.
'I would be very careful about that sort of language, with the greatest of respect.
'What Western Australia is doing is ensuring they are not taking diesel away from other states and are instead bringing additional supply into Australia.'
Bowen stressed that WA had taken explicit steps to avoid diverting supply from other jurisdictions.
'They sought and received assurances that the diesel they are procuring is additional to Australia,' he said.
'Their approach is complementary to the Commonwealth's actions, not contradictory.'
Bowen said he encourages state governments to act within their powers in a period of ongoing global disruption.
Federal opposition leader Angus Taylor said it was a sign Prime Minister Anthony Albanese was no longer in control (pictured, a service station in Melbourne that ran out of petrol in March)
'Governments taking action, including state governments stepping up where they can, is something I have always welcomed.
'We are comparing notes on our powers and working together to manage an extraordinarily difficult international supply chain.'
He confirmed other states are free to make similar decisions based on their circumstances.