Fuel price will increase with refinery closure
26 November 2021
by Chris Leitch, Leader
On the eve of presenting an 18,000 signature petition for parliament to National’s acting leader, Shane Reti, Social Credit leader Chris Leitch is predicting the price of fuel will increase once the refinery shuts down.
That increase will be felt across the board by motorists, transport operators, airlines – everyone who uses fuel currently produced by the refinery.
Anyone who thinks that relying on imported fuel will lead to lower prices is delusional.
An indicator is the 40 percent increase in the price of bitumen used for road building since the refinery stopped producing that earlier this year.
There will need to be a massive investment in new tanks to provide the storage capacity across the country for the refined fuel imports and that cost will be passed onto motorists.
Because of the corrosive properties of crude oil most of the existing tanks at the refinery will not be able to be repurposed for refined product and will likely be cut up for scrap.
A report presented to Cabinet last month says “Any future decision to procure domestic fuel stocks could incur annual costs also in the order of [blanked out]. If these costs were recovered through the existing levy on petrol and diesel sales they could raise the levy in the order [blanked out] per litre. Any future decision to impose minimum stockholding obligations on fuel companies would not have a material fiscal impact, but the resulting costs incurred by fuel companies would likely be passed on to fuel users through fuel prices.”
In the report Energy Minister Megan Woods says “I consider that the reduction in fuel supply resilience presented by loss of domestic refining warrants careful consideration by the Government.”
Despite this, Cabinet turned down any further action to pursue greater fuel security or the possible purchase of the refinery to keep it operational.
That means the opportunity to re-purpose the refinery to produce bio-fuels or other alternative fuel options will disappear and the cost of building new plants to undertake that development will be significant.
The potential of Marsden Point to become a green energy hub – a place where advanced new technology options like plastic to fuel, waste to energy, carbon capture, and desalination could have been deployed will also disappear.
I’m calling on the government to reconsider its position on taking ownership of the refinery to keep it operational to provide ongoing fuel security for essential services.