Union Puts a Price on Aussie Tanker Crews

MUA

By MarEx 2018-01-10 09:57:59

The Maritime Union of Australia (MUA) has claimed that the cost of hiring Aussie seafarers to move fuel around the nation's coast averages out to about one cent per liter at the bowser.

“The collision of an oil tanker and a bulk freighter off China's east coast this week and recent comments from Government MPs and Senators raising concerns that Australia has only 19 days’ supply of fuel has put this important issue back in the news,” said the MUA in a statement.

MUA Assistant National Secretary Ian Bray said that despite some conservative commentators writing off domestic shipping as too expensive, the union has continually led the debate on fuel security in recent years. But this has fallen on deaf ears in the Abbott/Turnbull Government with the number of Aussie-crewed tankers now down to zero.

"It was the MUA that pushed for the Senate Inquiry into Fuel Security in 2015 and at the time commissioned John Francis from Ocean Freight Management to conduct an independent evaluation of the cost of employing Australian crew on fuel import tankers,” Bray said. 

"The research found that for most petrol imports, employing Australian crew would cost about one cent per liter 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.

"The research found that former refineries are already converting berths to handle larger 80,000 ton import tankers and that on these ships, the cost of employing Australians is closer to half a cent per liter per ship.

"It is also true that the most expensive place to ship petrol in Australia is Adelaide, yet Darwin and other less populated centers continually have the highest retail price at the pump. None of this adds up."

International Transport Workers’ Federation Australian Coordinator Dean Summers said the tragic collision off China highlights the dangers of relying on international ships to navigate around unfamiliar coastline. “We have to rely completely, 100 per cent, on foreign flagged ships carry to our fuel – now that’s wrong,” he said.

“We should have a domestic shipping industry. It’s just like having your own trucking company or rail company but we don’t have that – we’ve given it away to the cheapest possible carrier of these goods. And when you start trimming off corners you start to see that things have to go – safety goes, crew’s conditions and standards go, and we’ve seen that time and time again."

The MUA statements come after incoming Liberal Senator Jim Molan, the former chief of operations for coalition forces in Iraq, said last week that if Australia’s current stockpiles of petrol, diesel and aviation fuel ran dry then the military would effectively be grounded.

At the time of the November release of the 2017 Foreign Policy White Paper, another ex-military member of Federal Parliament, Liberal backbencher Andrew Hastie, said he was very concerned about the issue and is open-minded to any suggestions, such as a fuel levy.

Such dire warnings are not new, with former Liberal senator Bill Heffernan in December 2015 saying that Australia's security was being put at risk because of dwindling fuel supplies and urged the Government to address the problem.

There are now no Australian-crewed tankers supplying fuel to the nation, down from 12 in the year 2000. At the same time, the number of refineries has halved to four. This means Australia now imports more than 90 percent of its fuel. 

A Senate inquiry into fuel security in 2015 heard that Australia's total stockholding of oil and liquid fuel comprises of two weeks of stocks at sea, five to 12 days of supply at refineries, 10 days of refined stock at terminals and three days of stocks at service stations.

MUA National Secretary Paddy Crumlin said: “A substantial disruption in fuel supply would have serious consequences across the Australian community when it comes to delivery of food, medicine and running family cars on our roads. Australians would expect our Government to have a better plan and this would involve more refining here and Australian-crewed ships to carry it around the coast.

“This isn’t only a matter of fuel security but also national security. Unlike Australian seafarers, foreign crews have no background checks yet they are carrying petroleum products, ammonium nitrate and LNG around the Australian coast.”

The Department of Environment and Energy says on its website that: “Australia is a signatory to the International Energy Agency’s (IEA) International Energy Program (IEP) Treaty and participates in IEA oil market and energy emergency committees.

“A key requirement under the Treaty is that member countries hold oil stocks equivalent to at least 90 days of their prior year’s daily net oil imports, and in the event of a major oil disruption, contribute to IEA collective actions by way of a stock release, demand restraint, fuel switching or increased production or fuel sharing,” says Crumlin.

“Australia has historically relied on commercial stock levels to meet the 90 day requirement. However, due to declining domestic production and increased demand for liquid fuels, these stocks are no longer sufficient to meet the 90 day requirement. Consequently, Australia has been structurally non-compliant with the 90 day stockholding obligation since March 2012.”