ExxonMobil stated the refinery, the closure of which was first reported in The Australian Financial Review, ”is now not thought of economically viable” and can be transformed into an import terminal. It’s the smallest within the nation, previous and inefficient, however produces about half of Victoria’s petrol output.
Federal Power Minister Angus Taylor described the choice as “extraordinarily disappointing” and insisted the federal government’s $2.5 billion gas safety bundle will nonetheless enhance the safety of provide in petrol and diesel.
However that was rejected by opposition MPs and commerce union leaders, who’ve now seen two refinery closure selections inside little greater than 4 months regardless of the federal government’s belated efforts to help the sector. BP pulled the plug on its Kwinana refinery in Western Australia in late October and that plant is because of stop manufacturing this quarter.
“That gas safety plan goes so properly …,” tweeted Madeleine King, the Labor member for Model in Western Australia, which incorporates Kwinana.
“As this Liberal authorities dithers, a whole lot of employee [sic] will get left behind.”
Exxon Australia chairman Nathan Fay stated the choice to transform the power into an import terminal “is just not a mirrored image” of the efforts of the Morrison authorities to supply help to the refining sector, which has been hammered by the affect of the COVID-19 pandemic.
However two of Australia’s 4 refiners have now rejected the rescue package and can shut, whereas doubts nonetheless dangle over Ampol’s Lytton plant in Brisbane, which is below assessment with a choice due this June half. Only Viva Energy has so far accepted the subsidy for its Geelong plant, agreeing in return to preserving it working at some stage in the measures.
Mr Walton stated that whereas inexperienced teams would welcome the closure as an indication of the tip to subtle fuels, “the truth of that is one other world multinational firm has decided in a boardroom exterior of Australia to maximise its income by manufacturing elsewhere on this planet and importing again into Australia”.
Altona state MP Jill Hennessy stated the closure was “a devastating blow for native employees”.
It additionally additional reduces Australia’s self-sufficiency in petrol and diesel manufacturing, growing its reliance on imports to maintain emergency companies, defence personnel, miners and farmers fuelled.
“Australia’s gas safety, low for a few years, is now virtually zero,” tweeted Australian Trade Group coverage adviser Tennant Reed. “If something ever impedes the liberty of the seas, we’re toast.”
The brutal choice by the US main, while not entirely unexpected, has rattled Victoria’s industrial heartland, stoking issues that the closure could have a snowball impact throughout heavy producers within the state.
An Exxon spokesman stated the corporate would work with the petrochemical firms to minimise the affect on their operations. The refinery will stay working whereas the transition to the import terminal takes place to make sure dependable gas provide for patrons, he added.
Exxon stated the choice to shut Altona, which began manufacturing in 1949, took under consideration declining home oil manufacturing, the aggressive provide of fuels into Australia, future capital funding “and the affect of those components on working earnings”.
All of the refineries made heavy losses in 2020 after the COVID-19 pandemic hit gas demand and depressed margins.
The Morrison government’s interim assistance package centres round a 1.15¢ per litre direct subsidy for home manufacturing of petrol, diesel and jet gas. A extra everlasting subsidy to kick in on July 1 continues to be below dialogue, with the business pushing for at the very least 2¢ per litre. A aggressive tender course of can also be underway for diesel storage contracts.
Mr Taylor stated the gas safety bundle would “proceed to progress and can improve Australia’s long-term gas safety”. He famous the federal government additionally supported the sector by the JobKeeper program.
“The federal government will proceed to work with the sector to help Australia’s refining functionality and gas safety, which can help our farmers, miners and truckies into the longer term,” he stated.