The blaze at Shell SIngapore Refinery, the company's largest plant worldwide, highlights how precarious Sydney's oil supply is should Shell proceed with its plans to discontinue Clyde as a refinery or disallow its use by third parties, the Construction, Forestry, Mining and Energy Union said Thursday.

The CFMEU is calling on Royal Dutch Shell to continue refining operations at Clyde, allow its sale as a going concern to an alternative operator or open the site to third-party import and distribution to ensure supply.

On July 27, Shell announced it would stop refining in Sydney and convert Clyde into an import-only terminal by mid-2013. The company aims to restrict the terminal as an exclusive Shell service, excluding other operators and hindering market competition.

Shell has shut down refining units and evacuated staff at the site which accounts for more than a third of Singaporeʼs total refining capacity.

CFMEU NSW Energy District Secretary Lorraine Usher said that without refining at Clyde, NSW motorists would be more exposed to international instability in petrol prices.

“Petrol prices are already a topical issue for many Australians and it seems ludicrous to think that weʼll soon lose the ability to refine locally and shield us from worldwide volatility,” Ms Usher said.

“The terrible fire at Pulau Bukom shows how precarious Sydneyʼs supplies really are when we stop refining locally. After mid-2013, it will be out of our hands completely.”

CFMEU said regional supply may yet be affected by the blaze, which continues at Royal Dutch Shellʼs 500,000 barrel per day Pulau Bukom plant in Singapore.