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AWU calls for a multi-billion dollar investment in Australia’s refining industry

September 14, 2020

A new report by BIS Oxford Economics, commissioned by the Australasian Refineries Operatives Committee and backed by the AWU, has laid out a roadmap for State and Federal Governments that could boost Australia’s fuel refining capacity and its dangerously low fuel stockpile.

Australia’s refining industry is under increasing threat with Viva Energy’s Geelong refinery facing closure, and refineries in Brisbane (Lytton, Caltex) and Kwinana (BP) also in financial difficulty.

Mick Denton, Chair, Australasian Refineries Operatives Committee, said: “Whether it’s Geelong, Kwinana, Altona, or Lytton – if any one of our four refineries shut it would be devastating.

“These refineries support well-paid, highly-skilled blue collar jobs in areas that desperately need them. Our governments can’t afford to shed 5000 of these jobs in the middle of this crisis.

“A shutdown of the local fuel refining sector would see a direct contraction of $6.7 billion – that’s 0.36% of GDP.

“We need to lock down the employment of our workers in fuel refining so they can continue to help power the economy.

“The work that Australians do in our refineries is critical, as this BIS Oxford report shows. We should be shoring up this capacity and looking to build on it in the years ahead.”

The report says Australia must urgently increase its fuel security capacity by at least 4,000 million litres by building new storage facilities at a cost of $2.7 billion. It would not only reduce reliance on overseas imports, it would create thousands of new jobs.

It’s also calling for an investment of at least $1 billion to enable the refining industry to transition to meet higher environmental fuel standards and safeguard its future. Both of which could be achieved with a rise in petrol duty of 1.12 cents a litre.

The report notes that Australia is a member of the International Energy Agency (IEA) and has an obligation to maintain stocks equivalent to 90 days of our annual net imports.  But, currently, its stockpile sits as low as 28 days.

“If a global crisis disrupted shipping routes, Australia would run out of oil in just over three weeks. Our cars would run dry and food supply chains would come crashing to a halt. It wouldn’t be just toilet rolls running out in our supermarkets and we would see pandemonium on our streets,” said AWU National Secretary Daniel Walton.

“It would also be catastrophic to our economy and would cause a national crisis on a scale that would make COVID-19 look like a blip. Everyone one of us should be worried about how precarious our energy supply has become.

“We have an opportunity to safeguard our fuel security but we need our Federal and State Governments to start acting now before it’s too late.”

Mr Walton added that the Federal Government’s fuel security announcement was a welcome first step . “But we need to build on it if we want to truly mitigate risk. The State Governments have a large role to play here and need to come to the party.

“Australians may baulk at the thought of paying more at the pump, but we actually have some of the cheapest petrol on the planet. A 1.12 cent a litre rise is a small price to pay to ensure we have enough fuel to last more than three weeks.

“We have to face facts that we are a nation reliant on oil and will be for the foreseeable future.

“What is being proposed in this report is a pragmatic solution to a problem that has plagued this country.”

Other measures in the report include increasing the amount of local crude oil production and improving transport links between the oil fields in Australian’s north west to the existing refineries.

Read the full report on improving Australia’s fuel security online here.

The future of Australia’s refining industry is at stake. The Australian Workers’ Union needs your help to protect jobs now and in the future so join your union today

 

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