Collins ready to get tough on av gas

:  Energy Minister Judith Collins tours the Marsden Point refinery in June
 

Energy Minister Judith Collins is threatening to go as far as legislation to compel the oil companies to provide sufficient aviation gas storage in Auckland.

Last night the extent of the fuel shortages in Auckland began to impact on the city.

That much was frustrating Labour because it allowed the Government to be seen --- yet again --- in full crisis management mode.

That included:

  • The Department of Prime Minister and Cabinet advising public servants to avoid non-urgent air travel.
  • The relaxation of various transport restrictions on heavy tankers to allow fuel to be trucked to Auckland.
  • The conscription of the navy’s tanker “Endeavour’ to transport fuel to coastal tank installations.
  • Prime Minister Bill English was asking his MPs and candidates to avoid non-essential travel.

Collins is planning a full-scale review of "what has happened and how it has happened".

“How have all the parts to this reacted and have those reactions been helpful or not,” she told POLITIK.

She says the review would involve the industry, the government, government agencies, other stakeholders, councils and airlines.

“I would have thought that one of the issues that will be on peoples’ radar will be the issue of storage,” she said.

She said the fact that Auckland got most of its fuel through the pipeline meant Auckland was in a different situation to the rest of the country which gets its fuel by coastal tanker.

“Even though there have been steps over the past few years to increase the storage it's pretty clear that with the big increase in  tourism and the increase in business activity in Auckland it is still not clear that storage is fully addressed.”

She said the Government had more powers to address the situation “than some might think”.

“There are some regulatory powers that the Government has.

“Some of thee powers may not previously ever have been used.

"Also the Government has the power to bring in legislation to deal with these situations.

"That's a pretty heavy hand to use, but there are also the issues of the impact on the economy and peoples’ wellbeing and welfare by not having sufficient fuel available."

But if the Government compelled the industry to build more storage who would foot the bill?

“That would have to be worked out, but originally that would have been dealt with by the people who owned the fuel."

But Collins – who has been fighting something of a battle with the oil companies over the lack of competition in the petrol market --- sees the building of more storage as an opportunity to increase competition within the aviation gas market.

“Just yesterday I was approached by a consortium that has apparently been looking at the feasibility of bringing an alternative supply of aviation fuel into the airport for particular airlines.

"At the moment all the aviation fuel that we have in New Zealand comes through Marsden Point, and it is owned by three companies."

This has become something of a theme with Collins --- the way Marsden Point acts as a protector of the oil company cartel in New Zealand.

She is currently sitting on a report from the Ministry of Business Innovation and Employment on service station forecourt fuel prices which includes proposals to address the refinery cartel.

She has said she will take action after the election. (If the Government is re-elected)

In July, she received an initial report which singled out the refinery.

“The refinery is run with tight capacity which is fully committed to the majors,” it said.

“ In addition, the refinery produces a bundle of products which can deter entry to firms only wanting to sell part of the bundle.

“These requirements represent possible barriers to entry which reduce the ability of entrants to respond to rising margins and limit their increase.

“We have had only a limited ability to inquire into the specifics of the refinery’s ownership and contracting arrangements, and so this conclusion is also tentative.”

That inquiry is continuing, and the current crisis has clearly added urgency to it.

But what it suggests is that she is looking at ways whereby more bulk fuel suppliers can come into the New Zealand market.

“There are all sorts of things that could happen; whether it's a market response or a regulatory response.

“I think we should just look at all of that.

“Sometimes it takes something like this to make us sit down and think is there another way of dealing with things.”

Of course long-term solutions will be the prerogative of the next Government --- but regardless of what happens on Saturday night, National will still be the Caretaker  Government on Monday which means Collins will remain in charge of this crisis for the immediate future.

Clearly, she is revelling in that role.

 

 

 

 

 

 

 

 

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