The Maritime Union of Australia (MUA) says a $2.4 billion oil refinery subsidy announced by the federal government does not address the need for a strategic fleet of Australian tankers to supply fuel.
According to the union, Australia’s plan to shore-up enough local supply of fuel for 90 days is useless if access to oil and fuel supplies totally relies on foreign shipping.
Despite billions of dollars worth of taxpayer subsidies, the plan will not secure the 90-day supply, the union says, which is a stockholding obligation under the International Energy Agency.
“If the Morrison government is serious about delivering fuel security for the country [..], then it needs to take greater control of how fuel is transported, refined, and stored to ensure our supply chain sovereignty is protected,” MUA assistant national secretary Jamie Newlyn said in a statement.
“A plan for fuel security requires a policy framework and investment incentives for the development of a strategic fleet of Australian-registered large trading vessels, including oil tankers, which would ensure supplies can continue to flow even during a crisis.
The MUA is advocating for the government to take on board the advice of shipping expert John Francis, who was commissioned by the group in 2018 to write a report on Australia’s fuel security. Francis’ report recommends that Australia own and maintain a minimum number of locally managed and owned tankers.
While the union welcomed the announcement that spells good news for refinery workers at Ampol in Lytton and Viva Energy in Geelong — the last two refineries in Australia — it said the plan was lacking, because in the event of a national threat such as economic crisis or military conflict, there was no way of guaranteeing the means of supply.
Under the current arrangement, whereby fuel and oil is brought into Australia by foreign shipping, the union warns that the longest the nation can expect to draw on fuel reserves is four weeks.
Paddy Crumlin, MUA national secretary, said the situation was galling given what the impact of COVID-19 on supply chains had already demonstrated. Maritime trade in particular was at risk of major disruption by global shocks, he said, making Australia especially vulnerable.
“When it comes to nations that are reliant on maritime supply chains, Australia is on its own in its failure to have a fleet of locally registered and operated large trading vessels to meet domestic needs and offer supply chain sovereignty,” Crumlin said.
“Australia’s supply chains are increasingly precarious, in particular with our reliance on other countries to refine and transport the overwhelming majority of our liquid fuel needs.
“Even our strategic reserves of unrefined crude oil remain in the United States, with no plan for how they would be transported during a crisis, while the lack of an adequate domestic stockpile means the country would run out of fuel for transport, aviation, and industry within a matter of weeks,” he added.