The finance minister says New Zealand’s fuel stocks remain at seven weeks worth, including stockpiles.
But Nicola Willis concedes that keeping that buffer was still “dependent on ships like this continuing to turn up”, despite interruptions to key global transport routes caused by the Iran war and block on ships using the Strait of Hormuz.
Speaking on Sunday afternoon at Channel Infrastructure’s Marsden Point Energy Precinct, Willis said she wanted to address concerns about “what we would expect to see if there were to be any challenges in the New Zealand fuel supply”.
“I know this is having a significant effect on you already… this is having an effect on people’s budgets already,” she said.
“Our priority is to continue to ensure New Zealanders do have access to that fuel every day. Not just relying on what’s stored at your local petrol station, you can also be assured that there’s fuel that is stored and fuel that is on the way.”
Planning and discussions with the fuel industry are underway, to consider what to do, including “considering who fuel goes to and when”.
Priority would be given to workers in low to middle income households and families with children, she said. This would protect the economy by making sure workers have transport, and recognises that children are particularly vulnerable.
Exploring an across the board fuel price cut did not make sense, Willis said, as some Kiwis would be particularly hard hit, while many people were already using public transport and car pooling.
“There are better ways of providing support to New Zealand than just doing a blanket fuel price cut … we’re focused on the economic needs of every Kiwi.”
“Our minimum reserve obligations are bigger than those in Australia, which means that we are in a relatively stronger position in that sense. But it’s also the case that we wouldn’t expect to be running into those buffers any time soon, because across our fuel importing companies, they are holding more than the minimum required.”
The government’s stance in relation to fuel supply threats was “not relaxed – we are vigilant and alert,” and more work was being carried out on the problem, Willis said.
Possible action needs to balance potential effects on inflation, the fact New Zealand has no crisis fund to draw on, and that international cost of borrowing money has risen considerably since this conflict began, she said.
New Zealand has a number of places fuel supplies arrive into the country, but Marsden Point is the largest, Willis said. The ship at dock in the background during the media conference was an example of a particularly large delivery, and was carrying about a week’s worth of petrol, diesel and jet fuel for the country, she said.
Today’s visit comes amid fears of an energy crisis, with the global price of oil skyrocketing in the wake of the US and Israel’s attack on Iran.
Iran’s response has included threatening ships passing through the Strait of Hormuz, a key channel for the transportation of fuel exports from the Middle East, and strikes on US-friendly neighbours’ energy infrastructure.
Marsden Point is New Zealand’s fuel import terminal, and until 2022 also had an oil refining facility. New Zealand now relies on imported refined fuels, without a facility to refine raw products.
Senior coalition politicians are at odds over whether the facility should have been closed.
Marsden Point.
Photo: RNZ / Peter de Graaf
Willis told Morning Report on Friday price increases were extremely tough and affecting all New Zealanders, but some were feeling it more than others.
“I can’t solve the pain for everyone. The cost of doing that would potentially involve levels of spending that would drive inflation higher, and certainly would put us in a more fragile position in terms of debt.
“So what we are looking at, is there something very targeted and temporary that we could do to assist those workers in particular who are most acutely impacted by these household budget squeezes?”
IRD and Treasury have been asked to come up with a package that could be implemented with urgency ahead of the Budget.
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