Pilots say jet fuel rationing is an issue the industry doesn’t need

Deputy Editor - Business·NZ Herald·

7 Dec, 2022 04:00 PM3 mins to read

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A pilots’ union says questions over New Zealand’s fuel reserves need to be answered as a glitch in an imported cargo has forced rationing at Auckland Airport.

Airline Pilots Association president Andrew Ridling, a Dreamliner captain who flies international routes, said he had not struck fuel issues in other countries.

“We’ve never seen anything like this apart from New Zealand - the fuel pipeline was the first one in 2017, followed by this announcement today. I think we do have an infrastructure issue that needs to be looked at,” he said.

“What level of strategic reserves does New Zealand hold of all fuel types? It just happens to be aviation this time.”

Energy and Resources Minister Megan Woods said she has asked officials to investigate whether plans to require minimum stocks can be brought forward from a target date of 2024.

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Ridling said it appeared they hadn’t been introduced because New Zealand doesn’t have the strategic reserves that other countries have.

“If we did close Marsden Point down we need to hold a minimum level of reserves to get us through.”

Marsden Point Oil Refinery ceased refining earlier this year. Photo / Tania Whyte

The Government considered but passed up on providing backstop funding for the 60-year-old refinery at Marsden Point, where Refining New Zealand ended its production operation in April, transforming it into a terminal for imported fuel. Refining margins had been falling and collapsed during the early part of the pandemic.

“It comes back to Government. If they’re going to close down Marsden Point, and they have their reasons for that, then strategic fuel reserves need to be held so these situations don’t occur,” Ridling said.

Z Energy says there are good supplies of aviation fuel and rationing was introduced as a precaution in case the supply system was hit by another problem. While airlines haven’t announced any changes to their schedules they may be forced to take on more fuel outside Auckland to ease pressure on supply in the city, the country’s main hub.

“If an aircraft has to carry extra fuel that’s extra money,” Ridling said.

“You’ve got to buy that fuel. There are more costs for an industry that was in crisis six months ago - it’s really an issue the industry doesn’t need.”

Maritime unions say the jet fuel “debacle” has exposed predicted weakness in the system.

The Maritime Union of New Zealand, the New Zealand Merchant Service Guild and the Aviation and Marine Engineers Association say fuel companies Z, Mobil and BP have let New Zealand down after the off-spec jet fuel threatened to disrupt pre-Christmas flights.

The three unions led a campaign earlier this year to keep Marsden Point refinery operating, with local deliveries of fuel provided by New Zealand-flagged coastal tankers.

The Maritime Union of New Zealand’s national secretary Craig Harrison said the new situation was a result of letting fuel security be determined by the self-interest of overseas corporates. Z is now owned by Australia’s Ampol.

Harrison said the fuel companies needed to front up to the public and explain themselves, as it had only taken a few months for the wheels to come off the new import system, at the worst possible time for holiday travel and as New Zealand rebuilds its tourism industry.