Senate Inquiry Hears Of BP Plans To Cut Aussie Ships And Local Jobs

The Senate Inquiry into Australia’s fuel security today heard of oil giant BP’s plans to remove the tanker British Loyalty from the Australian coastal trade to be replaced with cheap foreign shipping. 

This is despite a strong business case that the British Loyalty remains viable.

Maritime Union of Australia Assistant National Secretary Ian Bray said the British Loyalty is one of the last three Australian-crewed tankers on the coast. There were six in 2011.



“BP put over 900,000 tonnes on ships, over 700,000 tonnes of which is on big east cost cargoes that could be a viable trade for the British Loyalty or another similar sized vessel,” Mr Bray said.


“There is more than enough cargo BP just want to take environmental and safety shortcuts and have the lowest paid crew they can find from anywhere in the world.


“BP has the ability to retain the British Loyalty trading on the Australian coast or replace the ship, saving Australian jobs, protecting the environment and our fuel security.


“A cost analysis shows that the cost of employing an Australian crew on a product tanker equates to around one cent per litre at the petrol pump.


“BP are slashing Australian jobs, jeopardising our environmental safety with Flag of Convenience ships of shame and showing total disregard for Australia’s fuel security to squeeze every last cent of profit out of the community.


”We’ll be meeting with BP in Melbourne next Monday to see what they’ve got to say for themselves."


Mr Bray said that the Abbott Government’s Energy White paper, released yesterday, admits that Australia’s current oil stockholdings do not meet International Energy Agency obligations.


The white paper said compliance would require “an investment of several billion dollars in stocks and storage infrastructure over a decade. A decision on how to address this compliance issue will be made by the government in 2015”.


“In the medium term, we believe there is a good case to be made for using Australian ships to carry some portion of refined petroleum international imports,” Mr Bray told the Senate Inquiry in Melbourne.


“If the government is going to allow refineries to be closed and not mandate the retention of any fuel reserves, this is the very least we can do. It is also a cost-effective solution.


“The ongoing closure of refineries around Australia means we now import 91 per cent of our petrol and diesel – up from 60 per cent in 2000 – and this number will continue to rise with two more refineries in Queensland soon to be on the chopping block.”

Ian Bray and Penny Howard outside the Senate Inquiry


The MUA commissioned John Francis from Ocean Freight Management to conduct an independent evaluation of the cents per litre for employing Australian crew on fuel import tankers as promised at the previous hearing.


MUA Assistant National Secretary Warren Smith said: “The research finds that for most petrol imports, employing Australian crew would cost about 1 cent per litre per ship. If Australia decided that a portion of its import fleet should be flagged and crewed in Australia, the cost could be spread across the entire fleet of import ships.


“Former refineries are already converting berths to handle larger 80,000 tonne import tankers. On these ships, the cost of employing Australians is closer to half a cent per litre per ship.


“It is also true that the most expensive place to ship petrol in Australia is Adelaide, yet Darwin and other less populated centres continually have the highest retail price at the bowser.


“In addition, the research finds that there were over 600 individual tankers in Australian waters in 2013 and that number will increase with any reduction in Australian-crewed vessels and increasing imports out of Asia.”


Australians are worried about our national security at a time when terrorist group Al-Qaeda has openly declared their intention is to target international fuel ships.


More than half of Australia's fuel comes through the Straits of Hormuz to Singapore and then through the narrow Straits of Malacca, an area already notorious for its piracy.


The MUA believes that a serious environmental disaster in Australian waters is inevitable - whether it is by storing large volumes of petrol in large tankers in Port Phillip Bay, Moreton Bay or Botany Bay or by moving tankers around the Great Barrier Reef - when run by those unfamiliar with Australian waters and conditions.


A stable fleet of Australian ships on long-term contract is the only way to ensure our future fuel security and proper environmental protection.


These ships could be partly on the Australian International Shipping Register and partly on the Australian General Register to provide companies with additional flexibility.



Ian Bray: 0403 325 376

Warren Smith:  0400 368 945