The crew of a Victorian petrol ship is refusing to make a voyage they say will end with their sacking.

The company that leases the petroleum ship upon which the sailors are staging a sit-in claims the ship must go back to its owners.

Viva Energy Australia says the Tandara Spirit vessel’s contract expires in January next year, and it needs to go back to its owners in Singapore.

The company says it has complied with Australian legislation in its charter contracts. The law specifically requires vessel officers and crew to be covered by a trade union agreement acceptable to the International Transport Workers Federation.

But the union representing the crew says it is refusing to move, as it is expected they will be made redundant once they reach Singapore.

Reports say another ship with foreign workers will take over their usual route.

The labour dispute has been going on for over two weeks.

“Viva Energy no longer requires a dedicated coastal vessel to transport petroleum products within Australia,” a company statement says.

“As a result of agreeing new contracts which significantly increase ground fuel sales in Victoria, Viva Energy's requirement to export product from Victoria has considerably reduced.”

Maritime Union of Australia assistant national secretary Ian Bray told AAP that the workers would not sail to Singapore just to lose their jobs.

"They've been told there is no further requirement for them or their ship, take it back to Singapore, lay it up and they'll be made redundant," Mr Bray said..

"They are also pretty insulted the companies involved have engaged a foreign crew, being paid $2 an hour, to carry the petroleum product that the Tandara Spirit has been carrying for the last seven or eight years."

There are 36 workers affected - 18 on board the ship and a second crew on land.