Calls for levy to safeguard New Zealand’s fuel security

The Mari­time Uni­on says New Zea­l­and needs to keep its own fuel tankers on the coast to ensure fuel secur­ity, paid for by a small fuel levy.

Mari­time Uni­on of New Zea­l­and Nation­al Sec­ret­ary Craig Har­ris­on says the clos­ure of Marsden Point refinery was going to have a “dom­ino effect” on New Zealand’s fuel logist­ics net­work.

He says apart from the Marsden Point–Auckland pipeline, domest­ic fuel is cur­rently shipped by New Zea­l­and-flagged tankers to region­al ports for dis­tri­bu­tion.

Mr Har­ris­on says the future of New Zea­l­and coastal tankers is now in jeop­ardy, as Marsden Point own­ers Refin­ing NZ plan to use inter­na­tion­al ship­ping to deliv­er fuel to region­al ports in future.

He says this makes New Zea­l­and at risk from any dis­rup­tion to glob­al ship­ping sched­ules, as had been seen with con­tain­er ship­ping dur­ing the COVID pan­dem­ic.

“Mari­time trade is very vul­ner­able at this point to sup­ply chain shocks.”

Mr Har­ris­on says a reli­ance on oth­er coun­tries to refine and trans­port our fuel was a high risk strategy and the Gov­ern­ment may have been badly advised.

“There has to be a com­pre­hens­ive sur­vey of fuel secur­ity issues, that con­siders the wider implic­a­tions of a fuel crisis on the New Zea­l­and eco­nomy.”

He says a small fuel levy that provided a guar­an­tee of New Zea­l­and-flagged coastal tankers remain­ing on the coast would provide secur­ity and reduce risk in an unpre­dict­able glob­al envir­on­ment.

Mr Har­ris­on says New Zea­l­and coastal tankers could be requisi­tioned to bring in fuel from over­seas as well, in the event of an inter­na­tion­al crisis, wheth­er con­flict, tech­nic­al prob­lems or nat­ur­al dis­aster.

New Zea­l­and-flagged coastal tankers had been able to respond imme­di­ately with sup­plies when the Auck­land pipeline failed in 2017.

“In the case of a nation­al emer­gency, New Zea­l­and flagged coastal tankers could provide essen­tial backup ser­vices, unlike inter­na­tion­al ship­ping which has oth­er pri­or­it­ies.”

He says a major fin­an­cial event in glob­al mar­kets could res­ult in ships being held by cred­it­ors, anoth­er poten­tial source of dis­rup­tion.

Mr Har­ris­on says the col­lapse of the “just in time” sup­ply chain mod­el had moved the world to the “just in case” mod­el, which placed a new emphas­is on sup­ply chain secur­ity and redund­ancy to pro­tect from sys­tem fail­ure.

He says accept­ing the word of a privately-owned com­pany that things would be fine was not good enough, as the interests of Refin­ing NZ and New Zea­l­and were not the same.

Two New Zea­l­and flagged and New Zea­l­and crewed coastal tankers cur­rently oper­ate on the New Zea­l­and coast, the MT Kokako and the MT Matuku.

The ves­sels are man­aged by New Zea­l­and oper­at­or Sil­ver Fern Ship­ping Lim­ited and owned by inter­na­tion­al oper­at­or ASP Ship Man­age­ment Group, which charters them to Coastal Oil Logist­ics Lim­ited (COLL).

COLL trans­ports pet­ro­leum products from Marsden Point to New Zea­l­and ports on behalf of its share­hold­ers BP, Mobil and Z.