Potential job losses at Marsden Pt Oil Refinery could run into hundreds

A union predicts around 200 jobs at Refining NZ and hundreds elsewhere could be lost if the company switches to importing pre-refined fuel to supply to Northland and Auckland markets only.

First Union and E tu have about 180 members at the Refining NZ-owned Marsden Pt-based refinery which is doing it tough as the recent worldwide lockdown has seen fuel demand slump, and in the refinery planning to stop production in July and August.

National fuel demand fell by about 80 per cent when the country went into lockdown in late March to combat Covid-19. It is recovering, but petrol demand remains about 40 per cent below pre-Covid levels while diesel use is about 20 per cent lower.

First Union organiser Justin Wallace said about two-thirds of the 400 staff and 250 contractors at the refinery could be without work and the impact of job losses would be massive.

The refinery contributed $540m in GDP input, spent $60m in salary and wages each year, and supplied 86 per cent of jet fuel, 67 per cent diesel, 63 per cent petrol, and 65 per cent road bitumen for the country.

The company planned to simplify the refinery side of its business but was also evaluating a proposal that would go further and see it importing pre-refined fuel.

Wallace said people would expect fuel to be cheaper if more of it was
imported, but they were wrong.

He said some workers have been asked to take leave during the shutdown in July and August.

"The workers at the refinery want information on the doom and gloom to stop. They are a bit upset and want people to know that they are a major contributor of fuel, not just to Northland, but around the country," he said.

Wallace said the refinery should ramp up plans on its $37m solar hydrogen farm, Maranga Ra, with an initial capacity of 27MW and its construction, installation and operation would generate close to 300 jobs through local companies.

"By establishing entirely new industries, Maranga Ra will bring real benefit to a region that
faces some of the country's most acute social challenges, and create transition jobs for our talented workforce, 25 per cent of whom are Māori."

But Refining NZ spokeswoman Ellie Martel said a long-term shift to a terminal on fuel pricing would not impact on fuel prices as currently about 30 per cent of New Zealand's fuel was imported.

The company wasn't prepared to comment on possible job losses, saying the next update on its strategic review would be provided at the end of September.

On Maranga Ra, Martel said alternative fuel production was several years away from being economically viable and was not a solution to the current challenges of refining in New Zealand.

"There is no demand for hydrogen as a transport fuel today and biofuels produced elsewhere in the world are supplied into markets providing incentives for these products.

"The potential for the refinery to convert to producing alternative fuels will be part of the discussion as we look further ahead. We will be exploring what options might exist to re-purpose, reuse or redeploy the refinery facilities and capabilities we have."

Energy Minister Megan Woods said the government has been engaging with the refinery throughout its review and have been kept up to date on issues such as fuel supply security, the regional economy and New Zealand's transition to low carbon fuels.

"We are assured that New Zealand's fuel supply will remain secure because we can source fuels from multiple refineries in multiple locations to minimise supply risks, should Refining NZ switch to a fuel import business model."