TONY JONES, PRESENTER: There's further grim news on the jobs front with the announcement today that the Caltex oil refinery at Kurnell in Sydney's south will shut down.
More than 300 workers will lose their jobs over the next two years when Kurnell is replaced by an import terminal for transport fuels.
The knock-on effect is expected to impact hundreds more jobs, as Ben Worsley reports.
BEN WORSLEY, REPORTER: Workers have been clocking on at the Kurnell refinery for nearly 60 years, but their days are numbered.
GRAEME GRACE, REFINERY WORKER: It's personally devastating, it's devastating on every one of my workmates, male and female, young and old.
BEN WORSLEY: Within two years, the refinery will become a fuel storage facility. Of the 430 workers, fewer than 100 will remain. 300 contractors will also go.
PAUL HOWES, AUST. WORKERS UNION: We are not going to take this decision lying down. We are going to fight to save this refinery.
BEN WORSLEY: But the deal is done.
JULIAN SEGAL, CALTEX CEO: We have taken a decision that is going to secure the future of Caltex. That's what it is about.
BEN WORSLEY: The company says the plant is too old and too small to compete with the new mega refineries in Asia. The high dollar is also blamed, but not the carbon tax.
JULIAN SEGAL: Last year we lost $208 million in our refining operations. That's a situation that cannot continue.
BEN WORSLEY: Of the oil refined in Australia, 17 per cent comes from Kurnell. Caltex will keep its Queensland refinery running, but most of its product will be imported, possibly from Singapore, Korea or India.
PAUL HOWES: In any time of conflict, in any time of natural disaster, in any time of global uncertainty, Australia will not have a guaranteed supply.
ANDREW MACKELLAR, AUTOMOBILE CHAMBER OF COMMERCE: We have to ensure that it's not used as an excuse by the major fuel retailers to now try and push up the margins on petrol and other refined products.
BEN WORSLEY: Caltex insists there'll be no change at the bowser.
JULIAN SEGAL: There will be no impact. And there is no connection between Caltex owning and operating a refinery or not.
BEN WORSLEY: Despite another round of job losses, the Prime Minister remains bullish about the economy.
JULIA GILLARD, PRIME MINISTER: We have a strong economy, low inflation, low unemployment, low interest rates and no-one should be talking the strength of our economy down.
BEN WORSLEY: The closure will leave Australia with five oil refineries.
Ben Worsley, Lateline.
Copyright 2012 Australian Broadcasting Corporation. All Rights Reserved.
(Originally published July 26, 2012, by ABC Transcripts.)