The potential closure of the Marsden Point oil refinery provides a unique opportunity to break the stranglehold the oil companies have on fuel retailing.
Government should purchase it and keep it operating as a State Owned Enterprise.
The SOE could become a wholesaler of fuel, selling at a common price, allowing smaller retail operators like Gas and Waitomo to enter the market and provide real price competition at the pump.
The overseas oil company stranglehold is likely to increase with Australia’s Ampol, owner of one of Australia’s two remaining refineries, bidding to take over New Zealand’s largest retailer Z Energy.
Government ownership is key to breaking the stranglehold.
It is also the only entity with the ability to invest sufficient capital into the development of hydrogen, bio-fuels and Sustainable Aviation Fuels and the refinery is critical in making the transition to those alternatives to oil.
In a report prepared in May, Air NZ says globally SAF production facilities have only been established and commercialised with enabling government policy and investment support.
“Government can enable SAF development through assistance with upfront construction costs in the form of non- repayable grants, low or zero interest loans, or loan guarantees”, the report says.
“The aggregate effect of several OPEX and CAPEX support mechanisms could make a material difference to SAF commercial viability in the market”.
The report goes on to propose additional taxes as a way to fund that investment.
“Revenue generating levies relevant to international tourism could be explored as a revenue source for funding SAF investment. For example, the International Visitor Levy, or a similar funding mechanism”.
However Government could compulsorily purchase the refinery shares from the existing shareholders at no cost to taxpayers, using to capacity of the Reserve Bank which has already created around $60 billion in the last 18 months and it could also use that mechanism to invest in New Zealand’s liquid fuels future.
A Labour government used that capacity in the past and there’s no reason this one couldn’t act in the interests of New Zealanders and do the same.
Approximately 600 jobs will be lost if the refining operation shuts down with many of those people being forced to look for jobs overseas with the consequent loss of yet more expertise and knowledge to New Zealand.
A plan to develop the refinery would instead save those jobs, leverage that expertise for the future and ensure fuel security for the country’s essential transport services as the other options are developed.
The petition calling for the government to purchase the Refining company has over 12,000 signatures and is here. https://www.change.org/Save-the-Refinery
Chris Leitch is the Leader of Social Credit