Decision on Marsden Point refinery nears

Z Energy says it expects to complete negotiations on the future of the Marsden Point oil refinery by the end of the month.

Refining NZ is currently reviewing its business with oil company shareholders including Z seeking to persuade the company to shut its refinery and instead switch to importing prerefined fuels.

The First Union forecast last year that hundreds of jobs at Refining NZ would go and as many as 3500 jobs could be impacted in ancillary industries around the country if the change goes ahead. There is speculation that higher gas and electricity prices have further weakened the economics of the refinery.

Refining NZ declined to comment on the impact that was having earlier this week.

Z when releasing its annual results yesterday said the refinery was losing ‘‘cost competitiveness’’ at a time when larger, more efficient refineries in the Asia Pacific region were about to come on line. ‘‘Negotiations with Refining NZ remain ongoing with good progress being made. Z expects negotiations to conclude by the end of May,’’ it said.

A Refining NZ spokeswoman said a final decision to convert to an import terminal had not been made and any decision to do that ‘‘would ultimately be subject to approval of Refining NZ’s noncustomer shareholders’’.

Z Energy returned to profit despite a huge slide in the amount of fuel it sold during the year to the end of March.

The company’s results showed Covid having a massive impact on its business, with fuel sales volumes down 22 per cent to just under 3.1 billion litres and revenues down 29 per cent to $3.5b.

However, the company made a $57m profit, turning around an $88m loss in the previous year thanks in part to it securing $48m in cost savings.