Petrol shortage fears

Petrol stations across Sydney are running dry as fuel tankers from the troubled Cootes fleet are taken off the road, prompting a warning to motorists not to fill up their tanks in a panic.

Cootes delivers fuel to more than one-third of NSW's petrol stations: BP, 7-Eleven and Shell, including the Shell-branded Coles Express sites.

The company grounded trucks in Victoria last week amid safety concerns and a number of vehicles are off the road in NSW after Roads Minister Duncan Gay ordered full compliance inspections.

BP confirmed on Monday that a shortage of Cootes trucks had disrupted the company's distribution network and stations in Sydney had run out of some types of petrol.

Company spokesman Jamie Jardine was unable to say how many of its 424 NSW stations had run short because the situation was changing “hour by hour”.

McAleese, the owner of Cootes Transport, is due to reveal on Tuesday the magnitude of the hit to its earnings from the crackdown on its trucking fleet in NSW and Victoria.

The transport company sought an extra day to prepare a review of the timing and details of a restructure of Cootes, which employs about 1000 people, after seeking a suspension of trading from the stock exchange.

Authorities made snap inspections of Cootes' fuel tankers in Victoria on Friday, which led to the grounding of 25 of the 35 trucks and trailers inspected. Faults included defects in brakes, air bags, loose bolts and oil leaks.

McAleese also faces the possibility of law firms encouraging shareholders to consider class actions.

The loss of the contracts came just three months after two people were killed and five injured when a Cootes fuel tanker lost control on a bend in Sydney's northern suburbs and burst into flames.

Authorities in NSW and Victoria have also issued Cootes with hundreds of defect notices, including those for ineffective brakes, oil and fuel leaks, steering, axle, suspension and exhaust failures, broken engine mounts and tread peeling from tyres.

A number of service stations contacted by Fairfax Media on Monday reported fuel shortages, especially of E-10 petrol.

If VicRoads or the Roads and Maritime Services continue to refuse to allow Cootes tankers onto the road, supplies to fuel retailers across Sydney are expected to remain patchy.

Mr Jardine said BP was "making alternative arrangements but while we are putting that in place we are going to see intermittent shortages at service stations".

“You may see service stations with one grade of fuel temporarily unavailable. That's what we're seeing at the moment,” he said.

Mr Jardine implored motorists not to “panic buy”, adding “we are doing our utmost to minimise this”.

Shell and 7-Eleven have about 350 petrol stations between them in NSW and are also serviced by Cootes.

Shell spokesman Paul Zennaro would not say whether stations had run out of fuel, adding “we are monitoring the situation very closely … we are managing the situation with the available fleet that we have”.

He said Shell also used other hauliers, but urged customers “not to change their normal buying habits and only buy fuel when they need to”.

A 7-Eleven spokeswoman would not confirm if fuel shortages had occurred, but said the number of tankers available to supply its stores “may be reduced, and therefore supply may be affected”.

Cootes has been under intense scrutiny since last October when one of its petrol tankers was involved a fiery crash in Mona Vale which killed two people.

Authorities in NSW and Victoria have issued Cootes with hundreds of defect notices. They include notices for ineffective brakes, oil and fuel leaks, steering, axle, suspension and exhaust failures, broken engine mounts and tread peeling from tyres.

A Cootes spokeswoman said most of its NSW fleet was running but some trucks were off the road for inspection or repair.

Mr Gay said he made “no apologies” for fuel supply issues, adding “road safety is the No. 1 concern and all decisions we make are made on the grounds of … protecting the public”.

He has threatened to ground the entire Cootes fleet in NSW – a move Service Stations Association senior manager Colin Long said “would have a substantial impact” on fuel supplies in NSW.

Shell and BP both plan to switch to other haulage companies.

Cootes, whose fuel tankers are owned by McAleese, was placed in a trading halt on Thursday after warning that it was reviewing its earnings forecast for this financial year, in light of trading conditions last month.

"I don't imagine it will be overly pretty," a fund manager, who declined to be named, said of the anticipated hit to McAleese's earnings this year.

"The Cootes business has obviously got some compliance issues. They are going to have to be squeaky clean because they are going to continue to get audited."

McAleese shares plunged 29 per cent last month after it revealed it had lost the key Shell and BP haulage contracts.

The transport company has forecast that it stands to lose about $93 million a year from the loss of those contracts and its decision to drop fuel haulage contracts with 7-Eleven in NSW and Queensland.

McAleese floated on the Australian stock exchange in late November at $1.47 a share but last traded at just $1.10 a share before it was placed in a halt on Thursday.

A spokesman for Mr Gay's office said they did not know when the inspections would be finished, but the minister would wait until their completion to decide whether to ground the fleet.

SMH.COM.AU

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