Fears are mounting that international shipping disruptions and the impending withdrawal of coastal oil tankers operating in New Zealand could cause fuel shortages once Refining NZ becomes an import-only terminal.
The three major oil companies that hold majority shares in the Marsden Point oil refinery — BP, Mobil and Z Energy — have confirmed Coastal Oil Logistics Limited (COLL) will stop uplifting fuel from Refining NZ and carting it to areas south of Auckland from April 1.
The refinery will convert into an import-only terminal from that date under a new name, Channel Infrastructure.
COLL is a joint venture between the three major oil companies and charters two coastal vessels, MT Kokako and MT Matuku, from Silver Fern Shipping to carry refined fuel from Refining NZ to 10 ports around New Zealand.
A spokesman for the three oil companies said under the new supply chain model, fuel imported into Channel Infrastructure would be distributed primarily to the Northland and Auckland markets.
Fuel for the rest of New Zealand will be imported directly from overseas refineries into ports south of Auckland, including the South Island.
However, global shipping disruptions could impact fuel imports to all of New Zealand.
COLL chief executive Jon Kelly referred all queries to the oil giants his company was contracted to.
Channel Infrastructure will have the capacity to import up to 3.5 billion litres of refined fuel per year.
Presently, Refining NZ uses only about a third of the total crude oil tank capacity onsite and there are 180 million litres of base capacity in a shared terminal facility and another 100 million litres in private storage.
In a joint statement, Maritime Union of New Zealand / New Zealand Merchant Service Guild / Aviation and Marine Engineers Association said a reliance on overseas shipping and the running down of New Zealand's shipping capability has led to a "perfect storm".
The unions are concerned petrol supplies could be affected by the same type of shipping disruptions creating chaos in other supply chains such as building and construction.
But Energy Minister Megan Woods said after listening to the oil companies on their plans regarding fuel security, she was confident fuel supply would remain resilient after Channel Infrastructure came into operation.
"In fact some fuel companies are already using international tankers to deliver to regional ports with no reported issues. I will continue to monitor the situation closely.
"To further mitigate the risk of international supply disruptions, the Government has released a consultation paper on onshore fuel stockholding. It discusses a range of proposals for a minimum onshore fuel stockholding level and the options for how it can be achieved," she said.
Maritime Union of NZ general secretary Craig Harrison said ongoing supply chain
congestion was showing no signs of let-up in 2022 and many industries were suffering as a result, from the import of building supplies to primary produce exporters.
He said it was extremely concerning New Zealand coastal tankers were now under threat as well, following the decision to close Marsden Point refinery.
Harrison said it is bizarre at a time when international shipping was in chaos that New Zealand was "sleepwalking" towards a similar situation with fuel imports.
"It is essential the same problems occurring in the container trade are not allowed to replicate with New Zealand fuel supplies."
He said New Zealand coastal tankers provided a dedicated service and a level of redundancy which could not be guaranteed by overseas shipping, despite what petrol companies said.
There were numerous scenarios where outside situations could result in disruption and delays with overseas shipping, he said.
Harrison said one straightforward solution to shipping congestion would be to rebuild New Zealand domestic shipping capability to ensure regular and reliable services to regional ports, reducing the reliance on overseas shipping.
"We want the petrol companies to put fuel security for New Zealand first, not corporate profit. New Zealand tankers can move fuel internationally to New Zealand ports. This would provide fuel security and a dedicated, safe and skilled New Zealand workforce going into the future."
A report prepared by the Ministry of Business, Innovation and Employment said buying reserve fuel stock from overseas would cost up to $13 million annually once Refining NZ stopped refining crude and warned of dire consequences in the event of prolonged global supply disruptions.
The report was prepared prior to Refining NZ board's final decision to convert the refinery into a fuel-only import terminal from April next year.
The report says cost of compliance with the 90-day stockholding obligation under the International Energy Agreement will be up to $13m per annum to buy more reserve stock and, while the redundant crude tanks at Marsden Pt could be converted to hold domestic reserves, costs would be higher but the approximate figure has been redacted.